CIH: We owe a lot of people a lot of money
Bankruptcy filing moves forward
Central Iowa Healthcare corporate members resoundingly approved two key measures to maintain quality healthcare services without interruption to Central Iowans at its annual meeting Tuesday night.
By a vote 88-0, corporate members approved the sale of CIH assets to Unity Point Health-Waterloo.
UPH-Waterloo offered $12.5 million, according to information presented at the two and one-half hour meeting held in the downtown hospital’s conference room.
The unanimous vote dramatically surpassed the minimum two-thirds of 62 required for passage.
Financial and bankruptcy consultants hired by CIH to help shepherd the organization through the complex process strongly urged passage before the vote.
The sale of assets to UPH-Waterloo, if approved by the bankruptcy court, means CIH will cease to be an independent hospital.
The bankruptcy court and a committee of vendors will determine payments to vendors owned money by CIH.
The first of several hearings is scheduled Jan. 13 at 10 a.m. in the United States Bankruptcy Court in the Southern District of Iowa, 110 E. Court Ave, Suit 300, Des Moines.
A second measure to retain 13 trustees until the end of bankruptcy proceeding also received resounding approval by a 75-9 vote.
A letter to the editor in the Jan. 7 Times-Republican, authored by Dr. Dean Baker and Dr. William Wessels, both of Marshalltown, urged corporate members to vote yes on the sale of CIH assets but not to retain the current trustees.
” We (Baker and Wessels) want them (trustees) to take responsibility now,” read the letter. “We want to send a clear message to the current CIH board of trustees we have no confidence in your abilities to manage the organization anymore. We would like to encourage all corporate members to be present at the meeting on Jan. 10 and vote yes on the sale to Unity Point and no to retaining the current board members.”
All ballots were counted by independent third parties and monitored by Bill Zuercher of Marshalltown, a former hospital trustee and retired businessman.
“The purpose of both resolutions was to advance quality healthcare in our community,” said Board of Trustees President Carol Hibbs after the meeting. “We were happy corporate members agreed, it was important we pass both resolutions … we were pleased to see that and ready to move forward until the next phase of maintaining quality health care in our community.”
Corporate members are bona fide citizens of the CIH area who are at least 18 years of age, and paid their annual dues of $10.
UPH-Waterloo will bid on CIH’s assets within approximately 30 days of Dec. 20, the date CIH filed for Chapter 11 bankruptcy.
A Chapter 11 reorganization is a legal process designed to help companies continue to operate while they develop plans to restructure their finances and address other challenges impacting their financial performance. Chapter 11 permits, and even encourages, daily business operations to continue.
“We will need to let the bankruptcy process take its course and UnityPoint Health – Waterloo intends to offer a fair and competitive bid, said Pam Delagardelle, President and CEO, UPH-Waterloo.
If their bid is accepted, the court will hold a hearing to confirm and approve the sale of the assets free and clear of all liens, claims, or encumbrances pursuant to Section 363 to the winning bidder approximately within 10 days of the auction.
The parties will close the sale of the assets within approximately 30 days of the date on which the Court confirms and approves the sale.
Information released at the corporate meeting indicated it is possible a “stalking horse bidder” could exceed the UPH-Waterloo bid, although consultants said the process favored UPH-Waterloo.
If matters proceed smoothly, the bankruptcy proceedings could be completed by the end of March.
A report by Director of Finance Mary Pfantz revealed CIH lost $15,119,319 as of Nov. 30, 2015. One year later — as of Nov. 30, 2016, the loss had increased $3.6 million to $18,741,619.
“We saw significant downward trends across the board in key areas,” said Pfantz. “Births were stable, and the Wound Clinic has been a shining star. Business at our four clinics (Conrad, State Center, Marshalltown and Tama-Toledo are down. There was significant decrease in business at our Tama-Toledo clinic, much of that can be attributed to the loss of two doctors.”
As a response, CIH has adopted a “shop local” campaign.
CIH is the only full-service medical center in its area and more than 60,000 residents depend on it for a extensive variety of healthcare services.
Many outside of Marshalltown utilize the primary care clinics in Conrad, State Center and Tama-Toledo.
Mayor Harlan Quick of State Center said he and his wife patronize the local clinic.
“We hope the bankruptcy process goes according to plan and the transition to UnityPoint Health goes smoothly,” he said. “Regardless of ownership, having access to a clinic is vital to State Center … many of residents depend on the local clinic to meet their medical needs.”