Astria Health will close its medical center in Yakima, Wash., as the company restructures through Chapter 11 bankruptcy.
The U.S. Bankruptcy Court for the Eastern District of Washington approved the closure of the 214-bed facility that includes a Level I cardiac and Level II stroke center on Wednesday. Astria Regional Medical Center employs about 500 workers across 14 affiliated clinics.
Astria Regional cannot sustain the transition from inpatient- to outpatient-care models and its lenders do not want to refinance its debt, said John Gallagher, president and CEO of Astria Health. Closure is the only option, he said.
"It is with deep regret that we have to make this announcement," Gallagher said in prepared remarks. "We want to assure our patients that Astria Health's highest priority remains their care and we are working closely with other Astria Health Hospitals and with other local providers on their behalf."
The hospital reported a $10.4 million operating loss in 2017 and a $17 million operating loss in 2018, according to Modern Healthcare Metrics. It's long-term debt to total assets ratio increased to 72.5% in 2018, compared to the state average of 25%. Days cash on hand fell to -16 in 2018 and the hospital was only 38% full, Metrics data show.
The closure, which will occur over the next two weeks, is necessary to keep Astria's two other hospitals and affiliated clinics viable, which had been subsidizing Astria Regional's operations, executives said.
Declining inpatient admissions, higher nurse turnover as well as the replacement of electronic health record and revenue cycle systems stymied turnaround efforts, executives said in bankruptcy filings. Competitor Virginia Mason Hospital recently established an elective percutaneous coronary intervention program, which had been one of Astria Regional's differentiators.
Executives contemplated paring down service lines as it unsuccessfully shopped the hospital to 28 different parties. Only two offered to acquire all of Astria's hospitals, but at a significantly reduced price, according to filings.
The for-profit hospital chain Community Health Systems sold then-Yakima Regional Medical Center in 2017 to then-Regional Health. The hospital has lost nearly $40 million since then. It also had a negative cash flow in 2015 and 2016, according to Metrics.