Westlake Hospital in Melrose Park filed for Chapter 7 bankruptcy today, its owner said.
The 230-bed hospital has consistently been 80 percent empty in recent months and has been losing almost $3 million a month "in the face of declining local, state and federal health care funding, along with cost-cutting pressure from private payers," according to a statement from Pipeline Health, which owns the hospital.
The hospital has asked that a Chapter 7 trustee "continue to operate the hospital for short period of time, subject to further extension in the trustee's business judgment." The Chapter 7 filing does not affect Pipeline-owned West Suburban Medical Center in Oak Park or Weiss Memorial Hospital in Chicago.
Westlake tried for months to find a buyer, but "none of the entities it spoke with was able to produce a proposal to acquire the hospital that had adequate financial backing," the statement said.
Just two weeks after purchasing the three Chicago-area hospitals from Tenet Healthcare for $70 million, Los Angeles-based Pipeline announced plans to shutter Westlake, the least financially viable facility of the bunch.
The move prompted outrage from community members and elected officials, leading Melrose Park to file a lawsuit in Cook County Circuit Court alleging Pipeline acquired the hospital under false pretenses.
In the weeks leading up to April 30—the day a state health board was scheduled to hear Pipeline's application to close the hospital—the owner announced it was winding down services at Westlake. A Cook County Circuit Court judge issued an order preventing Pipeline from doing so, and the company was held in contempt of court.
The Illinois Health Facilities & Services Review Board, which decides the fate of health care projects in the state, ultimately approved Pipeline's application to shutter the Melrose Park facility. The vote came despite a rule stating the board "will defer consideration of an application until all related litigation is complete."
Melrose Park successfully sought judicial review in early May and filed an emergency motion to prevent the closure.
"Instead of fulfilling promises to assist Westlake, as Pipeline's CEO Jim Edwards declared earlier this year, the for-profit company turned its back on the hospital and the largely black and brown communities that rely on it," Democratic state Rep. Emanuel Chris Welch of Westchester said in a statement. "We deserve better than this, and I will not stand by and allow a corporation to gamble with the health and well-being of our community for the sake of profit."
"Westlake Hospital files for bankruptcy" originally appeared in Crain's Chicago Business.
