Physician group with 873 employees files for bankruptcy

Troy, Mich.-based University Physician Group, which does business as Wayne State University Physician Group, filed for Chapter 11 bankruptcy Nov. 7.

"UPG has determined that its clinical operations are no longer sustainable in the absence of long-term external subsidy," University Physician Group CEO Charles J. Shanley, MD, said in bankruptcy documents.

Dr. Shanley said several factors contributed to the group's weakened financial state, including declines in operational and revenue cycle performance.

"Perhaps most importantly, during a decade of steadily declining clinical revenue, UPG maintained an expansive and underutilized long-term leasehold portfolio distributed throughout metropolitan Detroit to support the missions of several of the smaller clinical departments in the context of a deteriorating relationship with one of UPG's affiliated hospitals," he said. "Occupancy and overhead expenses required to maintain these underperforming assets became a pernicious tax on the organization that is no longer sustainable at current volumes."

UPG intends to continue operating its business throughout the Chapter 11 process as a debtor-in-possession. The group will continue to support clinical operations on the Detroit Medical Center central campus, but plans to ultimately suspend operations at all suburban sites, according to bankruptcy documents.

"Today's restructuring news is truly about UPG realigning itself to its organizational mission," Dr. Shanley said in a statment to Becker's Hospital Review. "UPG is driven to provide the highest quality care to the patients and communities we serve as we train the next generation of providers. This is only enhanced by taking today's actions. Patients will continue to see their doctors and our staff will continue to teach and serve the community here in Detroit. As the DMC's partner, we too seek to be the best version of UPG, a truly strong participant within the growing partnership."

In its bankruptcy petition, the physician group, which has 873 employees, listed its assets as between $10 million and $50 million and listed its liabilities in the same range.

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