FAIRMONT — Fairmont General Hospital announced Friday morning that it plans to file for Chapter 11 bankruptcy protection on Tuesday, a move to try to make the business stronger as it seeks a strategic partner.
The following is the text of the press release sent out by FGH early Friday. A detailed story will follow.
Fairmont General Hospital Announces Next Steps in Partnership Search
Hospital to file for Chapter 11 bankruptcy as necessary step in preparation for mntinued strategic alliance search
The Fairmont General Hospital Board of Directors made the decision to take an important step today in the hospital's continued search for a strategic alliance or partnership that will secure the facility's future.
Following the continuation of its careful and deliberate study of all options, the Board will ftle on Sept. 3, 2013, for bankruptcy protection in the United States Bankruptcy Court for the Northern District of West Virginia under Chapter 11 of the United States Bankruptcy Code.
"Our ultimate goal is to make sure Fairmont General will be healthy, strong, and well-positioned to thrive and provide quality care in this community for generations to come," said J. Michael Martin, chairman of the Fairmont General Hospital Board.
"Today, we need to take an important step by filing for Chapter 11 so that we can move forward in fiscally preparing the organization to best negotiate a partnership from a position of strength."
Throughout the Board's research, discussions with potential partners, and consultation with hospital financial advisors, this move emerged as the clearest, fastest path toward completing a partnership in the near future. Specifically, Chapter 11 will allow Fairmont General to restructure long term debt and contracts, and bring costs in line with local, regional, and national norms in the healthcare sector.
"We're moving forward to take this action now because we know it is necessary to make us financially and operationally stronger and to pave a smoother transition when we do fmd the right partner," said Robert C. Marquardt, president and chief executive officer of Fairmont General Hospital. "During our search, our financial advisors and nearly every potential partner has identified that this step is necessary to the successful completion of a financially strong strategic alliance."
The process is anticipated to be complete within 12 months.
Partnership search continues
During the bankruptcy proceedings, Fairmont will continue its search for a strategic alliance and maintain the option to align with a prospective suitor at any time.
Given today's healthcare and economic landscape and using the tools available through Chapter 11, Fairmont General will be in a stronger position to align with a strategic partner that brings greater resources, efficiencies, coordination, and that shares the hospital's vision for care in the community.
In fact, Fairmont General is among many independent hospitals in the nation who are proactively seeking a strategic alliance of some form. So far in 2013, at least 45 hospital partnerships, such as the type Fairmont General seeks, have been publicly announced.
"By being proactive, we are taking our future into our own hands and ensuring the future of our hospital" said Marquardt. "We are fortunate to be able to make the partnership decision from a position of greater strength than even a year ago."
Today, Fairmont's acute care discharges are up nearly 12 percent as compared to the same time last year, and net patient revenue is up $5 million over last year. These results, while positive, do not alter the need to take Chapter 11 action which will restructure existing long-term debt and contractual commitments of the hospital in order to ensure its future in our community.
"When the plan is approved and debts are paid or restructured, Fairmont General will emerge a more focused and profitable hospital and better positioned to align with a strategic partner and grow," concluded Marquardt.
Commitment and access to quality care unchanged
Through this time of transition, access to care and services at Fairmont General remains unchanged. Fairmont General employees and physicians carry the same dedication to patient care as they have in the past, and patients can expect no interruption to services.
Fairmont General's leadership has taken the necessary steps to ensure that the hospital's employees will not miss a paycheck and will continue to receive a competitive benefits package. Vendors for hospital supplies and services will continue to be paid.
"This decision to file for bankruptcy was not reached overnight and the process won't be completed overnight, either," added Martin. "We are in the early days of this process and don't yet have all the answers. There is much work to be done before we fully complete it, but we have the leadership and the outside legal and financial counsel to be successful,"