Hospital Files for Bankruptcy

In the wake of devastating state and federal inspection reports that ripped crucial accreditation status away from Parkview Community Hospital, the financially floundering care facility has filed for bankruptcy protection.

Despite the Chapter 11 filing, officials said they will keep the struggling hospital open while they reorganize and consider alternatives, such as allowing Riverside County to run the hospital’s emergency room. “We look at this as a positive move,” said Parkview spokesman David Jarrard. “It gives us time to recover from the damage that has been done to our hospital in recent weeks.”

On Tuesday, U.S. Bankruptcy Judge David Naugle approved a request from Parkview to accept $7 million from a financing company to pay expenses in the coming year.

Parkview was barred from participating in the state’s Medicare and Medi-Cal programs in February after inspectors said the hospital posed “immediate jeopardy” to the health and safety of patients. It was a crucial blow for the already struggling hospital, which has lost more than $30 million since 1995. Nearly 70% of the hospital’s funding comes from Medicare and Medi-Cal patients.

A prestigious hospital surveying company also yanked the hospital’s accreditation, which about 80% of the country’s hospitals hold.

Although a detailed report on the problems at Parkview won’t be available for several weeks, most of the major problems focused on how medications were administered to patients, hospital staffers said.

The blows have outraged the many in the community, which relies heavily on the hospital known for catering to the city’s poor and uninsured. A rally was held earlier this month at the hospital, and employees have taken to wearing blue ribbons in a show of support.

Recently, inspectors agreed to put a temporary hold on their findings, giving Parkview time to fix problems. State inspectors will return May 15.

But the flap has already cost the hospital millions of dollars, Jarrard said, including about $4 million the week after inspectors announced the findings.

Even worse has been the damage to the hospital’s reputation. Several major private health-care insurance companies, such as Blue Shield and Aetna, pulled their contracts with Parkview, citing a clause that requires the hospital to participate in the government-funded health insurance programs. Hospital leaders are now renegotiating those contracts.

On average, the 193-bed hospital fills between 20 and 30 beds a day. But it’s unlikely the hospital could handle many more patients because many nurses and other staffers left for jobs elsewhere in an effort to avoid being laid off. Staffing levels have plummeted by one-third throughout the hospital.

The dramatic drops in revenue and personnel have forced the hospital to close its cancer and pediatric units and to no longer accept ambulance traffic.

The courts will monitor the hospital’s reorganization efforts in the next 12 months, Jarrard said. A new financial partner may also be considered.

In addition, Riverside County officials have asked a consultant to look into the cost of running Parkview’s nearly defunct emergency room, turning it into a satellite office for the county’s main hospital in Moreno Valley. County Executive Officer Larry Parish said the move could ensure that some of the city’s poorest retain easy access to health care.

“We are an extremely large geographic county, with health needs that stretch all the way to Blythe,” Parish said. “But there are concerns that we don’t react so quickly that we become owners of the problem before we make sure we have the resources to manage it.”

Despite the bankruptcy filing Monday in Riverside, Jarrard said staff morale remains high.

“What they see from the board now is a commitment to remain in a community hospital and to continue to serve patients,” Jarrard said. “And just knowing there’s some momentum is heartening.”