The Tyrone Hospital board and administrators held their second public meeting to educate the community on the situation they are facing.
The meeting had a much smaller crowd than the first meeting held January 4.
The main purpose for last night’s meeting was to inform the public on the bankruptcy issues the board, administration, and their attorneys are dealing with. Attorney Jim Walsh of Johnstown, the attorney that is working with the board and administration with these matters, was present to explain what Tyrone Hospital will be dealing with, what options they had when they filed bankruptcy, and what options they have for the future. Walsh also answered any questions the general public had.
When filing bankruptcy, Walsh explained that the hospital board had four options. They could have done nothing, which would have resulted in the hospital closing its doors in approximately six to seven months. The board could also have voted to close Tyrone Hospital immediately, which the board was not in favor of doing. The next option was to put the hospital up for sale. This was not accepted by the board since it would be unsure who would purchase the facility. The last option was to seek relief under chapter 11 bankruptcy. This would give the hospital a chance for reorganization and hold off their creditors while they compile this plan.
Walsh said that the board was in favor of filing chapter 11 bankruptcy because this was the best chance to preserve the entity and its assets. He said they are committed to keeping Tyrone Hospital open.
Walsh explained that once chapter 11 bankruptcy is filed, the hospital board has 120 days to compile their own reorganization plan. That expires at the end of this month. They do not plan to ask for an extension.
It was explained that Tyrone Hospital owes approximately $7-10 million to various creditors. The hospital administration was not certain of the exact amount.
During his presentation, Walsh explained that he feels confident the best reorganization plan was an option discussed at the first meeting, an affiliation with a larger health care facility. He said that he worked with Miners Hospital in Northern Cambria County when that hospital was in financial trouble. Walsh explained that Miners Hospital is also a small rural hospital like Tyrone and was in terrible financial shape. He said that Miners Hospital became affiliated with the Conemaugh Health System and that has worked out fine.
The option for Tyrone Hospital that was discussed last night was the option to join an affiliation with Altoona Regional Health System. This has been the main health system that the Tyrone Hospital board and administration has negotiated with. Walsh explained that Altoona is serious about discussing an affiliation with Tyrone Hospital. Altoona has hired consultants to come in and study the possibility of an affiliation.
However, Altoona and Tyrone have not reached an agreement yet and are not quite close to reaching one. Walsh used the example of someone looking for a new car and that Altoona is just looking and “kicking the tires” at this point.
When asked by a member of the audience if a decision to become affiliated with another health system would come back to the corporate membership for approval, Walsh said it would not. He explained that US bankruptcy laws state that 50 percent of the votes cast must say “yes” for a reorganization plan to be approved. It would come from the hospital board and creditors.
There was no timetable presented as to when the decision to become affiliated with another health system, such as Altoona, would take place.
