Illinois will give about $350,000 in emergency cash to Roseland Community Hospital to allow the financially distressed Far South Side hospital to avert a threatened shutdown.
The “temporary assistance,” announced Wednesday afternoon by Gov. Pat Quinn’s office, aims to keep the hospital open while its board and state officials develop a long-term plan to put the safety-net hospital on solid financial footing.
Quinn warned that the bailout is not a long-term solution for the facility, which treats many patients who are poor and don’t have insurance.
“Roseland Community Hospital is an anchor in the community, and we will do what we can to protect the patients and employees,” Quinn said. “The hospital must take the necessary steps to develop a plan for a sustainable future.”
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The state money comes with conditions that require it to allow independent financial experts to conduct a “comprehensive review of the hospital’s budget, operations and finances,” the state said in a statement. The hospital also is required to bring on an independent chief restructuring officer who will oversee the operations and the development of a long-term plan to keep Roseland viable.
A Quinn spokeswoman said the emergency money comes from an existing fund dedicated to public health, community and nonprofit organizations. Roseland officials did not respond late Wednesday to requests for comment.
The amount is less than half of what a Roseland vice president said earlier in the day that the hospital needed to meet its current payroll obligations.
Sharon Thurman, a Roseland vice president, earlier said the hospital required about $1 million from the state to remain open. She said hospital officials requested a total of $7 million from the state to pay down all of its debt that is more than 90 days delinquent.
State officials have said the governor’s top health care advisers have met several times with Roseland officials during the past six weeks, but the hospital failed to respond to its requests for a “viable plan to properly run the hospital.”
Brooke Anderson, a Quinn spokeswoman, said the hospital and its board “have serious management issues that need to be addressed,” and she blamed its deepening financial woes on mismanagement.
Roseland reported an operating loss of $2.4 million for the fiscal year ended March 31, 2011, according to the most recent financial statements available. It also said it is on pace to lose about $5.4 million this fiscal year.
Since Roseland went public with its plea for state money two months ago, the governor’s office has been working with the hospital to identify potential partners.
State officials and Sen. Emil Jones III, whose district includes Roseland, confirmed Wednesday that they’ve fostered talks between the hospital and Loretto Hospital on the West Side, another financially distressed safety-net.
Roseland and Loretto entered into an agreement to pursue a merger, Jones said.
“Loretto has not made a decision yet … and they’re still taking a look at how they can lower Roseland’s deficits before they will do a merger,” Jones said. “If it’s not going to be Loretto, maybe other hospitals could take an interest. All I know is, we definitely need Roseland to stay open for the community.”
Loretto officials did not respond to requests for comment.
Roseland on Tuesday replaced President and CEO Dian Powell after officials said she inaccurately blamed the hospital’s deepening financial woes on missing payments from the state.
Powell on Monday said the state hadn’t paid $6 million it promised for development and operation of an adolescent behavioral health unit that Roseland opened in 2011.
The following day, the hospital said her statement was inaccurate. Instead, it said, the state issued an advance supplemental payment of $958,240 to keep Roseland afloat amid mounting debt.
Board Chairman Genivee Chapman was appointed interim CEO.
Powell told the Tribune on Wednesday that the governor’s office pressured board members to push her aside in favor of new leadership. She said she developed a comprehensive plan that aimed to save about $8.4 million and presented it to officials from Quinn’s office, but never heard back from them.
Further, she said, Roseland began building the adolescent behavioral health unit before she became CEO. Although Powell was the hospital’s board chair at the time, she said the decision was made by former CEO Earmon Irons Jr. with a promise from Jones to fund the project with $3 million from the state.
“If there was bad judgment, bad management, it happened with (Irons), who used operations money based on what the senator had promised,” said Powell, who acknowledged the hospital did not have anything in writing guaranteeing the commitment.
Irons could not be reached for comment.
Jones said the hospital received $7 million in two installments between early 2012 and February, more than twice what Roseland initially sought in state assistance.
Date: June 6, 2013