NPHS, which serves some of the poorest neighborhoods in Philadelphia, took a number of steps in recent years aimed at financial improvement, including closing St. Joseph’s Hospital in Philadelphia last March. However, the system continued to struggle financially after closing St. Joseph’s and it eventually filed for Chapter 11 bankruptcy Dec. 30.
To repay pre-bankruptcy debts, NPHS wants to borrow $3 million from Gemino Healthcare Finance, but unsecured creditors in the system’s bankruptcy case and the Pennsylvania Department of Human Services want proof the system will successfully emerge from bankruptcy before NPHS borrows the funds, according to the report.
NPHS operates two facilities in Philadelphia — Girard Medical Center, a 168-bed psychiatric hospital, and Goldman Clinic, a substance abuse treatment center — and unsecured creditors in the bankruptcy case are not sure Girard Medical Center can be operated profitably. In a recent court filing, the unsecured creditors argued the loan to NPHS should not be approved until the system reduces expenses, including executive compensation.
However, the system’s bankruptcy attorney, Lawrence G. McMichael, told The Philadelphia Inquirer NPHS is “doing everything it should be doing to preserve viability.” He said the system is keeping all options open. “The whole system could be sold. It could be refinanced. There might be a merger,” Mr. McMichael told The Philadelphia Inquirer.
NPHS has already inked a contract to sell shuttered St. Joseph’s Hospital. The system has agreed to sell the hospital to MMP Hospital Partners in Philadelphia for $8.12 million.
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