Focus Management Group

Healthcare Industry Experience

Hospital Holding Company

Industry:

Healthcare

Company:

Hospital Holding Company with Two Regional Facilities

Situation:

A Lender was concerned about the long-term viability and related cash flows of its borrower, a hospital holding company with two operating regional facilities. The Lender was receiving unanticipated last minute funding requests on a daily basis.

Focus Scope:

At the request of the senior lender, Focus Management Group was engaged to review the operations, management and cash flows of the holding company and one of the hospitals and to recommend a course of action.

Tasks Performed:

  • The Focus team analyzed the issues facing the two hospitals, which uncovered significant variance to plan, significant overdrafts, unpaid payroll taxes and an overall lack of cash flow necessary to fund operations much less support debt service.
  • Having determined the lack of viability of the hospital, Focus then worked with staff and management to develop a shutdown plan while simultaneously supporting the sale of real estate process.
  • During this process, Focus Professionals monitored performance to the shutdown budget.

Results:

  • Patients were relocated to alternate facilities within 36 hours of the decision being taken to close the hospital, while shut down activities were conducted in an orderly manner including the retention of selective employees via a third party employee leasing plan.
  • As a result of Focus’ timely activities, the lender received a 100% recovery of exposure, including all fees.
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