[Presentation] Distressed Hospitals: What Every Board Should Know About Assessing Risk
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The hospital industry is undergoing fundamental structural changes that make closure or bankruptcy a risk that is now visible on the horizon for many U.S. hospitals. Since 2010, an estimated 190 hospitals across the country have closed; since 2011, approximately 85 additional hospitals have sought bankruptcy protection.
On September 30, 2015, the cargo ship El Faro left port in Jacksonville, Florida, bound for Puerto Rico and aware of Tropical Storm Joaquin and its projected path. Twenty-six hours after setting sail, battered by the winds and seas created by Category 3 Hurricane Joaquin, El Faro sank off the coast of a Bahamian Island with the loss of her entire 33-person crew. With the benefit of advanced weather forecasts, satellite imagery and modern communications, how did the El Faro end up in harm’s way resulting in one of the worst disasters in the modern history of the U.S. Merchant Marine?
With the benefit of hindsight, we can ask of both the El Faro and these hospitals, “Why didn’t they change course when they had time?”
- How does a hospital progress from stable to stressed to distressed without altering its doomed trajectory as years pass?
- What actions can help hospital leaders and board members properly assess the dynamic risk environment confronting hospital leaders?
- What strategies can mitigate the risks posed by an uncertain and changing set of operating risks?
- What does the progression toward closure or bankruptcy look like?
Who should attend: Hospital leaders, board members, legal counsel and lenders and credit enhancers.