Penobscot Valley Hospital files for Chapter 11 bankruptcy protection
January 29th, 2019 -- Penobscot Valley Hospital (PVH) has filed for Chapter 11 bankruptcy protection. The hospital will remain open and operating as usual while it works through the bankruptcy process, which is expected to last 12-18 months. Filing for bankruptcy protection for debt restructuring enables the hospital to stay open, provide high quality health care and critical services to patients, and to keep jobs in the community.
PVH management expects to emerge from the bankruptcy process in a much stronger financial position.
“The hospital is not closing. Patient health remains our top priority and we will continue to provide excellent healthcare to our community during the bankruptcy process,” said Crystal Landry, CEO of Penobscot Valley Hospital.
The ripple effects of regional economic conditions including the loss of Lincoln’s major employer, Lincoln Paper and Tissue, have led to high unemployment rates, loss of commercial health insurance coverage, and families moving out of the area. In-patient admissions have decreased 65% and overall patient volume has decreased by nearly 10% over the last four years.
On a state and national level, the lack of Medicaid expansion and cuts to reimbursements have also negatively impacted hospital revenue.
“We have made tremendous strides over the last three years in bringing our operational costs in line with revenue. Legacy debt is the issue here, and Chapter 11 allows us to restructure that debt so we can keep our doors open and ensure that our community continues to have a hospital close to home,” said Landry.
PVH administrators expect minimal impact on operations, services, and staff during the bankruptcy process. PVH anticipates that all employees will be paid in the ordinary course and no layoffs are planned. Over the last three years, the hospital has made numerous changes to operations and is operating efficiently with current service levels.
“Our patients will continue to receive excellent care here at PVH. There will be no compromises when it comes to ensuring patient safety and high quality interactions with medical staff. Healthy patient outcomes remain our number one priority,” said Dr. Paul Turnquist, President of Medical Staff for PVH.
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