A Quorum Health hospital in Illinois suspended all services and laid off more than 800 employees on Tuesday after weeks of pressure from the local community to stay open and an alleged backroom deal with the city mayor.
In the wake of its closure, MetroSouth Medical Center in Blue Island, Illinois will receive $2 million from Brentwood-based Quorum as a part of the deal for what they call “transitional fees” as the 314-bed hospital seeks a new owner. The Chicago Sun Times reports the money will be used for training and new equipment for the hospital and was based on how much property tax MetroSouth paid Blue Island. The agreement also required Blue Island Mayor Domingo Vargas to present Quorum in a “positive” light at the state review board meeting exploring the city’s request to delay the closure.
According to a Quorum spokesperson, the hospital shut down due to loss of physician surgical coverage and growing understaffing issues.
In a statement, Quorum leadership said, ”Patient safety has been MetroSouth’s highest priority; unfortunately, suspension is necessary as the ability to provide adequate care in a safe manner is not currently possible.”
The closure leaves Quorum with seven hospitals left in its largest market — Illinois — and only one facility remaining in the Chicago area.
Quorum is also cutting back in its California market: the hospital operator recently announced the divestiture of Watsonville Community Hospital to Los Angeles-based Halsen Healthcare.
The transaction totaled $39 million for the company, which they plan to use to lighten their debt load. The company finished last quarter with more than $1.2 billion of long-term debt.
The sale of the 106-bed hospital leaves Quorum with one remaining facility in the state, a 30-bed hospital in Barstow.
Quorum shares (TKR: QHC) were down nearly four percent Thursday afternoon to $1.17. The company recently received a warning from one of Wall Street’s largest debt rating agencies that if the company’s new revenue cycle management contracts fail, they run a risk for necessary refinancing.