Receive and explore monthly insights from our Restructuring & Dispute Resolution team.

Reviving distressed healthcare organizations: Strategies for operational improvement and sustainability

Distressed healthcare organizations have faced financial and operational complications; and the COVID-19 pandemic only added to those complications. Despite these challenges, some healthcare organizations have managed to improve their operations and financial position. These organizations have implemented strategies such as telehealth, remote patient monitoring, operational efficiency, revenue cycle management, and alliances.

Q&A: Tips for how healthcare organizations can navigate distress

When a company or healthcare organization is in distress, it can be a challenge to get additional capital. In this Q&A, CohnReznick professionals provide advice on how organizations can pique the interest of debt providers, what to do to help make sure your organization is rated fairly, and ways that healthcare organizations are using debt to fund expansion efforts.

Case studies

Academic Medical Center

Background: A 1,300 bed academic medical center that employs over 10,000 people, and is one of the largest nonprofit health systems in the United States, is a Level 1 trauma center and is ranked among the top hospitals in the United States by U.S. News & World Report. The hospital offers a wide range of medical services including heart care, women's health, and pediatrics. It is also home to one of the leading cancer centers in the world.

Practitioner’s role: Advisor

Results:

• Engaged multidisciplinary teams to address patient throughput resulting in the system experiencing increased volume, improved Emergency Department (ED) and inpatient throughput processes, and improved team and leadership engagement in the related work processes.
• Helped develop/implement house-wide daily rounding structures and huddles in order to prioritize care progression.
• Enhanced bed capacity management, reduction of blocked beds, and establishment of new bed assignment policies.
• Increased optimization of technology platform for monitoring and managing bed flow.
• Redefined standard roles and implemented split flow model in the ED.
• Decreased rate of patients leaving the ED prior to treatment through redesign of ED triage process and increasing throughput times.

Orthopedic hospital and health network

Background: Specialty healthcare system with multiple locations with less than eight weeks of cash on hand. Creditors were seeking recovery amid serious liquidity issues and DOJ challenges.

Practitioner’s role: CRO in out-of-court restructuring and sale

Results:

• Improved EBITDA from -$12M to +$7M in seven months
• Kept 10 secured lenders, the DOJ, 105 physicians, and 800 unsecured creditors cooperating for an eight-month process while restructuring and selling out of court
• Ran successful sale process with multiple viable offers in six weeks
• Paid all secured lenders 100% and unsecured creditors 70-100%

Recent engagements

Hospital

Our role: Developed a detailed assessment of the hospital’s budget, cash flow, revenue cycle, operating efficiencies, and comparative benchmarking. Assisted in negotiations with their senior lender.

Pharmacy Company

Our role: Retained by ownership to return the company to profitability after a year of significant losses. Managed disbursements and negotiated extended credit with the primary supplier.

Retail Center

Our role: Retained by the Sponsor to restructure and extend loan, create opportunity for additional equity infusion to support leasing, and subsequently position property for refinancing or sale. 

Lab Grown Diamond Company

Our role: Assisted start-up with their year two strategy, built their detailed projections, helped them to reduce expenses in order to extend their cash runway, and assisted in negotiations with their key supplier.

Capital Markets

Our role: Provided litigation support and expert witness services for three concurrent complex structured finance litigation matters resulting in our client securing a $1.84 billion settlement.

Class B Office

Our role: Retained by the Sponsor to restructure and extend loan, address rent roll expirations, and position the property for refinancing.

Beverage Company

Our role: Financial advisor to UCC Committee in matter involving a direct-to-consumer wine membership company and supplier.

Upcoming events

AIRA 39^th Annual Bankruptcy & Restructuring Conference (Jun. 7-10) – Speaking/Attending

International Insolvency Institute 23rd Annual Conference (Jun. 10-11) – Attending

TMA 19th Annual Mid-Atlantic Regional Symposium (Jun. 14-15) – Attending

TMA NYC Summer on the Rooftop (Jun. 20) – Attending

ABI Northeast Bankruptcy Conference & Consumer Forum (Jul. 13-15) – Attending

NYIC/TMA NYC/TMA NJ Super Networking Party (Jul. 27) – Attending

ABI Mid-Atlantic Bankruptcy Workshop (Aug. 7-9) – Attending

TMA Northeast Regional Conference (Aug. 30-31) – Attending