Detroit Medical Center, with scant cash on hand and expecting a $91 million loss for 2003, is expected to ask bondholders for debt forgiveness or better terms in a meeting this week. The not-for-profit system owes more than $560 million to bondholders. According to the Michigan State Hospital Finance Authority, DMC lost nearly $60 million in the first six months of 2003 and had 15 days' cash on hand as of June 30, compared with 41 days' in the year-earlier period. Earlier this year, the system received an additional $50 million from city, county and state government coffers in recognition of its role as a safety-net provider. DMC operates 10 hospitals and institutions. In a written statement, DMC interim CFO Chris Palazzolo said, "It would be premature to comment on prior financial performance, or the various work-in-process plans until a final 2004 plan is submitted to the DMC board, bondholders and the Temporary Oversight Committee." The oversight committee, made up of various government officials, was created as a result of the $50 million bailout. DMC was profiled as part of a Modern Healthcare special report this week on the trouble with turnarounds. Read the report. -- by Mark Taylor
Troubled DMC may ask bondholders for help
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