5/11/17 Recap: Georgia-based not-for-profit healthcare system filed for bankruptcy to pursue a sale to Prime Healthcare Foundation Inc., armed with a $5mm DIP credit facility to fund operations during the case. The company notes the following as factors leading up to its bankruptcy: (1) an older Medicare-based population, revenue from which is subject to discounts and write-offs; (2) a large Medicaid-dependent population, reimbursements for which result in financial losses on many patients; (3) The State of Georgia's election NOT to partake in the Medicaid expansion program which left a pool of patients with modest means uncovered and uncompensated-for upon treatment; (4) hospital consolidation providing newer larger options (PETITION note: this seems dubious considering there were no other hospitals within a 30-mile radius but what do we know?); (5) lack of doctors in in-demand specialty areas; (6) inability to finance large capital intensive projects; and (7) service to "self-pay" (read: uninsured) patients as part of its non-profit charitable function - despite efforts by the ACA to cover everyone. Sadly, the company's filings paint a picture of a dire healthcare situation in and around the Georgia with healthcare operators all around the state failing for many of the same reasons above.
Jurisdiction: M.D. of Georgia
Capital Structure: $22mm principal and interest Series 1998 Bonds, $7.3mm principal and interest Series 2016 Bonds
