Southern Regional Medical Center inched closer to new ownership Wednesday as a federal bankruptcy court indicated it has approved the sale of most of the assets of the ailing Clayton County hospital to a California turnaround specialist.
Prime Healthcare's impending acquisition of Southern Regional comes after a series of lengthy hearings before U.S. Bankruptcy Court Judge Wendy Hagenau that stretched over the past two weeks.
“Pursuant to the direction of the bankruptcy court, the parties are currently negotiating the final terms of the sale,” Southern Regional spokesman Tal Wright said in a statement Wednesday.
New ownership represents renewed hope for the Riverdale hospital. The hospital has been teetering on the brink for nearly a decade as it watched patients with health insurance and money replaced with an influx of sick and uninsured patients from throughout the metro area who flooded its emergency room.
The hospital reported $21 million in uncompensated care in fiscal 2014, and said nearly a third of its ER patients had no insurance. Hospital administrators sought help from the county to avoid closing its doors. Closing the hospital would have created a medical desert on the southside since Southern Regional’s 331-bed facility is the largest on the southside. As Clayton’s third largest employer, closing Southern Regional would have been an economic blow.
The county chipped in money as did voters who approved a $50 million bailout as part of a Special Purpose Local Option Sales Tax or SPLOST. In exchange, the county urged Southern Regional officials to come up with a game plan to avoid repeated returns to the county.
Enter Prime Healthcare. In July, the California conglomerate signed a letter of intent to buy the Riverdale hospital for about $18 million. Soon after, Southern Regional's nonprofit owner filed Chapter 11 reorganization in U.S. Bankruptcy court.
For a short time, it looked as if Southern Regional would have two suitors when Grady made a surprise, 13th-hour bid for the hospital but pulled out at the last minute as the hospital, it creditors and others headed into the bankruptcy hearing earlier this month.
Prime Healthcare has said it has no immediate plans to uproot the 43-year-old hospital’s 1,366 workers. In fact, it pledged $1 million to recruit doctors and plans to invest $50 million in Southern Regional. The company has saved 34 hospitals and 35,000 jobs in 10 states, according to its website. It is the largest “minority-owned” hospital system in America, the website also noted.
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