Original Story: freep.com
One of the region's last independent hospitals has filed for bankruptcy but plans to stay open.
The physician-owned Doctors Hospital of Michigan in Pontiac listed debts between $10 million and $50 million in its Chapter 11 petition filed this week in U.S. Bankruptcy Court in Detroit. A Detroit business bankruptcy attorney is reviewing the details of this case.
It is the second bankruptcy declaration in a decade for the struggling 105-year-old hospital, which was known as North Oakland Medical Centers during its last bankruptcy in 2008. Years earlier, it was called Pontiac General Hospital.
Hospital officials said Friday that their hospital is losing money and weighed down by debt that the business inherited as part of the hospital's 2008 sale to a private physicians' group. Flint-based McLaren Health Care system was a minority partner in that deal; McLaren's stake was bought out three years later by a group of 42 doctors.
The hospital's single off-site location, Waterford Ambulatory Care Center, closed earlier this month due to "cash-flow constraints" but could reopen in the future, said attorney Max Newman of Butzel Long, who is representing Doctors Hospital.
Doctors Hospital itself remains open and there are no plans to close, said hospital CEO John Ponczocha,
Hospital officials say they hope to reorganize the business's finances in bankruptcy so that it can potentially continue as an independent hospital. The hospital has about 200 full-time-equivalent employees.
"There's a number of potentials here," Newman said. "It could be purchased, it could merge with somebody. But at this point, the effort is going to be primarily to keep it running as a standalone entity."
The bankruptcy filing lists Wisconsin Physicians Service Insurance Co. as the hospital's largest creditor with about $6.4 million. Long said there are also significant loans from hospital insiders which are outstanding but not on the list. A Detroit hospital litigation attorney is following this story closely.
There are few independent hospitals left in southeast Michigan. Several formerly independent hospitals have been absorbed into larger systems, including Garden City Hospital (now a part of for-profit Prime Healthcare Services) and Mercy Memorial Hospital in Monroe (now part of the nonprofit ProMedica Health System).
Another independent hospital, Crittenton Hospital in Rochester, has a pending deal to join the St. Louis-based Ascension Health system.
Doctors Hospital of Michigan
• Original hospital dates to 1910
• Formerly known as North Oakland Medical Centers and Pontiac General Hospital
• Currently owned by a physicians group and is for-profit.
• Has about 200 full-time-equivalent employees
• Last filed for bankruptcy in 2008