DRMC eyes end of bankruptcy

DOWNEY - Despite repeated assurances by Downey Regional Medical Center officials that the 199-bed hospital would emerge from Chapter 11 bankruptcy protection unscathed and fully functioning, there were those who have felt nervous about its eventual fate, especially after affiliation negotiations with two hospitals failed.DRMC declared bankruptcy on Sept. 14, 2009. The Daughters of Charity Health System was the first medical system DRMC opened negotiations with, in February this year. The reason it gave for backing out was the timing, citing the "tough, tough economy, especially for health care," calling any deal "economically unfeasible." Negotiations with a second potential affiliation partner, Presbyterian Intercommunity Hospital, also collapsed when it let its letter of intent to acquire DRMC expired only last May 7. Presbyterian balked at, among other things, the prospect of rigid reimbursement rates put on the table then by the health plans, as well as the looming seismic safety standards that must be met by 2030. Today, the note of optimism in Rob Fuller's voice is unmistakably firmer, and stronger. The DRMC executive vice president/chief operating officer says that DRMC is currently in the process of renegotiating all its contracts with its insurance companies, based on 'fee-for-service' market rates, definitely a breakthrough. A new rate structure agreement with Blue Cross was struck on Sept. 15, while its new agreement with Health Net should be finalized by Nov. 1. "We are making good progress with three other plans. These should be done by the end of the year," Fuller said. Meanwhile, the 90-year old hospital continues negotiations with other parties for a possible effective collaboration. "But we've had no firm offer that we can run away with," Fuller said, adding: "We have in the meantime solved our working capital woes. We have enough money now to run the business." "Thus the outlook is good for maintaining good quality medical care service to our patients," he continued. "Even as we speak, a team of lawyers and consultants appointed by the Bankruptcy Court are by our side [referring to DRMC president and CEO Ken Strople, and himself] every day as we work on our restructuring program." Speaking as an ex-officio member of the Hospital Board, Councilman Mario Guerra said, "The city's concern is that we have a good hospital that will provide good quality care for our community. I'm satisfied that this is happening. Based on what I've heard and what I know, there's no chance of DRMC closing its doors now." Said Fuller: "We hope to get out of bankruptcy next year, probably as an independent entity as before."

********** Published: October 14, 2010 - Volume 9 - Issue 26