Hospital needs help, again

For the fifth time in its 44-year history, Rockdale’s hospital needs help to stay open.

Dick Burns, president of the Rock-dale Hospital District board, told The Reporter the board and others are searching for an interested party to step in and partner with Little River-Rockdale Hospital, formerly Richards Memorial Hospital.

That also applies to LRHC’s other health care facilities including local clinics and Cameron’s hospital.

LRHC filed for Chapter 11 bankruptcy on July 24 with the intention of restructuring and paying off creditors.

PARTNER—But the situation has changed this fall and the specter of finding a partner to provide financial support, or face shutting down, looms.

The Reporter asked Kylie Shcherbakov of LRHC if the situation has reached the point that a partner is needed or the consequences could result in eventual closing of the hospital.

She said LRHC could not comment officially, but added: “I would not disagree with that statement.”

Burns said a search is well underway to find just such a partner. “We’ve had some interest but nothing defi nite yet.”

“Everything is in a fog. Until the fog lifts we don’t know what we’ve got. ” —Dick Burns, hospital district board president

Both Burns and Shcherbakov expressed dismay that rumors, and a news broadcast, had indicated LRHC was already in Chapter 7 Bankruptcy, a status that’s a prelude to selling off assets to pay off debtors.

“That is simply not true,” Shcherbakov said.

“We are not in Chapter 7, “Burns said. “I can’t rule out that might not be the case at some point, if things don’t happen, but for right now we are defi nitely not there.”

Is Chapter 7 vs. Chapter 11 a big deal? See sidebar story.

“We don’t want that (Chapter 7),” Burns said. “We want to keep these facilities open to serve Rockdale, Milam County and Central Texas and we are working as hard as we can to keep them open.”

LETTER—The latest development came in a letter sent Oct. 19 to LRHC employees by Ronald Winters, who is serving as Chief Restructuring Officer of the bankruptcy.

Winters is managing director of Healthcare Management Partners in Nashville, Tennessee.

The letter states LRHC’s original intent was to restructure and emerge from bankruptcy by year’s end.

“Unfortunately, internal and external conditions have changed unexpectedly,” it adds.

“If we are to proceed, it must be with new partners who can provide financial support within a very short time frame,” he said.

The letter also noted eventualities might include “...if necessary, responsibly and lawfully ceasing most, if not all, of our healthcare operations.”

However, Winters’ letter did not mention Chapter 7 bankruptcy by name.

COMPLEX—“This (bankruptcy) is just so complicated,” Burns said. “There are so many people involved, so many entities involved.”

He noted that the hospital board is not actively involved in the day-to-day manueverings of the bankruptcy. The U. S. Western District of Texas lists scores of filings in connection with the Chapter 11 bankruptcy since July 24.

It notes Nov. 9 is the new bar date (deadline) for creditors to file amended administrative expense property claims and Jan. 20, 2019, as the governmental bar date.

That’s under Chapter 11.

“The board fully supports LRHC in their efforts to find a solution,” Burns said.

FOG—Burns said there’s not actually a deadline to find a partner to keep LRHC open but directors know it’s not an open-ended time period.

“We have not been given a date, like ‘it’s going to close on x-day of x-month if we don’t find somebody’,” he said.

“Everything is in a fog,” he said. “Until the fog is lifted, we don’t know what we’ve got out there.”

NUMBER FIVE— The hospital came within months, weeks, perhaps days, of closing four other times in its history as follows:

• 1989—Emory C. Camp, hospital board president, announced Richards Memorial had lost $1-million over the past three years and was in imminent danger of closing.

Spurred by three $50,000 matching grants from the Alcoa Foundation, the community raised over $400,000 and the hospital stayed open.

• 1995—Directors said the facility was underutilized and needed a new approach to stay open.

The community voted in a hospital district, intending at the time to collect only a sales tax, but reserving the authority to levy a property tax in the future.

• 2000—That future was only five years away. Another crisis loomed and directors instituted a property tax, setting the initial rate at 48 cents.

Later that year the hospital went into bankruptcy, emerging in June, 2003,

Later Richards Memorial merged with a private company, Blackhawk Health Care.

• 2010—Blackhawk cut the hospital staff by 15 to 20 percent as it struggled financially.

(Cutting the staff is also something that’s happened in the 2018 situation. Before this year’s cutbacks LRHC employed nearly 600 persons systemwide and an associated physician’s practice employed 63 doctors.

In late November, 2010, Blackhawk closed its Lakeside Hospital in Bastrop and officials in Rockdale were worried RMH was next, possibly in as soon as mere days.

Emergency meetings followed and a new buyer was found. The hospital stayed open.