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Tyrone Hospital to discuss reorganization plan with corporate members Monday

The Board and Administration of Tyrone Hospital will address the corporate body of the hospital on Monday, August 27 to discuss the reorganization plan filed by hospital officials in U.S. Bankruptcy Court earlier this month.
The hospital has been dealing with the Chapter 11 Bankruptcy issue for almost a year and dealing with financial woes since 2001. The 2000 fiscal year was the last fiscal year the hospital made a profit. At the end of the 2000 fiscal year, Tyrone Hospital had a $1.6 million surplus.
According to hospital officials, they were not left with many options in this Bankruptcy issue. They could have either done nothing, which would have closed the hospital in six or seven months; closed the doors immediately; put the hospital up for sale; or attempt to seek relief under Chapter 11 Bankruptcy.
The hospital decided to seek relief under Chapter 11. Their first option that Hospital Administrators seemed to be in favor of in the beginning was to develop an alliance with a larger health system. However, this was met with much resistance by a number of corporate members due to the possibility they would lose control of the hospital.
However, Tyrone Hospital officials had numerous talks with Altoona Regional Health System on a possible alliance with that facility. This seemed to be the direction the Tyrone Hospital Board and Administration was headed until talks with Altoona Regional concluded and a July 25 statement was released by Altoona Regional officials. At that point, Altoona Regional CEO Jim Barner stated that their facility would not pursue any further alliance options with Tyrone Hospital.
Since the alliance with Altoona Regional did not work out, Tyrone Hospital officials have been forced to go at it alone in developing a plan to get the hospital out of bankruptcy. This plan will include using Tyrone Hospital’s cash flow to make this happen. According to the plan, the hospital will be making substantial payments to their 250 creditors that will last until the year 2013. Payment plans to the various creditors will include some of the payments with interest and some without interest. There are 13 different classes of creditors listed. One of which is the trustee in the $2.5 million malpractice judgment against the hospital, but not included is the lawsuit filed against the hospital by former CEO Thomas Bartlett. He is seeking close to $7 million.
Tyrone Hospital will start with close to $1 million in cash. They will also be raising prices by 2 percentage points each year during this time period. Another aspect of this plan is to attempt to increase patient volume. In order to do this, they will have to attempt to have the number of inpatients increase from the current figures of 1,132 per year to at least 1,571 per year when the six year period ends.
In order for the plan the hospital has submitted to go into effect, it does not only have to be approved by a U.S. Bankruptcy court judge, but also its creditors.
Tyrone Hospital has been facing a problem that is common to most small rural hospitals, especially hospitals that fit in the category of 0-99 beds and Tyrone Hospital is in this category. Hospital officials stated at one of their previous meetings with the general public that this category is the toughest one to make money.
Monday’s meeting will begin at 7 p.m. and will be held in the LGI Room at the Tyrone Area Elementary School.