California hospital files for bankruptcy as cash collections fall short

Gardens Regional Hospital and Medical Center, a 137-bed hospital in Hawaiian Gardens, Calif., has filed for Chapter 11 bankruptcy, according to The Wall Street Journal.

According to documents filed in bankruptcy court, the hospital faces more than $30 million in debt. To cover its costs, the hospital needs to generate $129,359 in revenue each day. However, the hospital only generates $96,728 in cash collections daily.

Garden Regional, which opened in 1997, serves mostly low-income people and is part of Los Angeles County's safety net. It took in more than 8,500 emergency room patients last year, and it provides more than $11 million in charitable care annually, according to WSJ.

In court papers, board member David Herskovitz said that although more people have insurance under the Affordable Care Act, the increase in insurance money isn't enough to offset the cost of caring for the low-income population that continues to be chronically underinsured or have plans with high deductibles.

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