PA Hospital's Financial Woes Trigger Harsh Repercussions

John Commins, April 11, 2012

Usually this column features success stories about community and rural healthcare leaders who are a force for good health, economic growth, and stability in their communities.

We cannot, however, ignore the gloomy "Side B" stories of hospital bankruptcies and closures that appear with unsettling regularity just about every day in newspapers across the United States.

That is what's happening now at Saint Catherine Medical Center Fountain Springs in Ashland, PA, a town of about 10,000 souls located 52 miles southwest of Wilkes-Barre. The 67-bed, investor-owned, acute-care hospital, which was built in 1967, this week filed an emergency petition for Chapter 11 protection in a federal bankruptcy court.

Because the filing was a rush job, it's still not clear how much the hospital owes, or to whom. That will be sorted out in the coming weeks and months.

Federal officials have appointed attorney William G. Schwab as the Chapter11 trustee of the medical center. He told local media that "when all is said and done 2012 will not be the date of the last admission." Schwab also said he hopes to "do what is right" for the employees, community, patients, physicians, and shareholders. He didn't have many details to share this early in the process.

Judging by news accounts, the bankruptcy filing seemed inevitable after the Pennsylvania Department of Health in March found deficiencies and violations that threatened patient health and put their safety in immediate jeopardy.

John Commins

John Commins is a senior editor at HealthLeaders Media.


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