A newly formed coalition of physician-businessmen in Atlanta is making a bid to reopen 100-bed Southwest Hospital and Medical Center, which filed for Chapter 11 bankruptcy protection last September before finally shutting its doors to patients in early January.
Southwest Fulton Investment Group, which is made up of about 15 physicians, plans to stake a claim to the hospital at a bankruptcy sale this week. The physicians say they are committed to purchasing the facility and rebuilding it, reviving its status as one of only a handful of black-owned hospitals in the nation.
"We want to revamp it and build a state-of-the-art facility so it can better serve the community," said Titus Duncan, a surgeon who is president of the Atlanta Medical Association and a member of the investment group. "The community needs this hospital."
Duncan and his colleagues are among a growing number of physicians who have created similar investment groups to save struggling or bankrupt hospitals (Jan. 10, p. 6). In Orange County, Calif., for instance, a group of physicians pledged $20 million to help purchase four hospitals from Tenet Healthcare Corp. in a deal that closed earlier this month.
Built in the early 1970s, Southwest had just one elevator and antiquated operating rooms, which discouraged doctors from referring patients, Duncan said. Along with a patient population that was about 70% indigent or uninsured, those factors led to a long, steady financial decline at Southwest. When it filed for bankruptcy six months ago, the independent not-for-profit hospital listed $25.1 million in assets, not including 6.5 acres of undeveloped land in Atlanta, and liabilities of approximately $25.1 million.
Duncan said only a new facility-a for-profit hospital he said he expects to open within a couple years if the group is successful in its bid-will spur an influx of referrals from area doctors who had shunned Southwest in recent years. Southwest "was old. It was just not a good enough facility to take patients to. It just did not live up to the standards of other hospitals," he said.
He declined to provide any details about the group's financing, or the amount the doctors planned to bid at the bankruptcy sale. A winning bid is expected sometime next month, but the sale must be approved by the U.S. Bankruptcy Court in Atlanta.
Several developers reportedly are also interested in bidding on the hospital and its nearly 80 acres. Though the hospital has long catered to needy residents, the area includes fast-growing middle-class neighborhoods and nearby subdivisions with $500,000 homes, Duncan said. Many of those prosperous patients long ago began bypassing Southwest for more modern and better-equipped facilities in Atlanta, Duncan said.
"We're confident we can do this," Duncan said. "We have the strong support of the community. A lot of developers are interested. They want to tear it down," he said. "We want to keep this as a hospital."