PITTSBURGH (TNS) — A bankrupt Mercer County hospital is slated to close in less than three weeks, throwing 699 employees out of work, after efforts to acquire the facility collapsed.
On Monday, Steward Health Care System LLC notified the U.S. Bankruptcy Court for the Southern District of Texas that it will close its 80-bed Sharon Regional Medical Center on Jan. 6. Steward, a for-profit hospital chain that filed for Chapter 11 bankruptcy in May, notified Pennsylvania officials that 699 hospital employees would lose their jobs as a result of the closure.
Shuttering Sharon Regional “is in the best interests of the debtors,” according to the court filing. The emergency department is already closed.
Sharon Regional’s patients will be discharged, along with their medical records, to another hospital in the area or one of the patient’s choosing, according to the bankruptcy court filing.
UPMC Horizon — Shenango Valley Hospital in Farrell, is 3 miles from Sharon Regional.
“We are here to take care of the people of Mercer County,” UPMC spokesman Paul Wood said Tuesday. “UPMC continues to invest and expand access to care that is needed by people across Mercer, Lawrence and surrounding communities.”
In addition to Farrell, UPMC operates hospitals in Greenville and New Castle.
About 5,000 Highmark members have used Sharon Regional for care in the past year and the Downtown-based health insurer will help coordinate follow up care with local providers, spokesman Aaron Billger said in an email.
Meadville Medical Center in Crawford County, 18 miles away, pulled out of plans to acquire Sharon Regional, announcing Monday that “adequate funding to financially stabilize the hospital for the long term was unable to be secured.”
That announcement followed a meeting Friday with the Buhl Regional Health Foundation where hospital officials learned that “adequate funding to financially stabilize the hospital would not be forthcoming and our efforts to preserve SRMC were no longer viable.”
The collapse of the deal ends four months of sometimes tense negotiations with Steward; Buhl Foundation in Hermitage, which helped raise about $30 million for the hospital acquisition; and Birmingham, Ala-based Medical Properties Trust Inc., owners of the hospital’s real estate. The deal was expected to close Dec. 1.
Money raised to save the hospital included $4.5 million contributed by the state in September.
“We genuinely want what is best for the community and remain willing to support SRMC and to preserve essential health care for the Sharon community,” Meadville Medical Center CEO Philip Pandolph said in a prepared statement.
Meadville Medical Center said it was “incredibly disappointed in the outcome.”
Steward filed for voluntary protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, with over $9 billion in liabilities. The hospital chain’s debt was largely due to long-term lease obligations to Medical Properties Trust, a real estate investment trust, which Sharon civic leaders had battled over property leases.
In 2016, Steward, which operated 31 hospitals in the U.S., sold the hospitals’ real estate to MPT, which then collected lease payments. Hospital officials and Sharon civic leaders said the leases were burdensome, making it difficult to properly maintain the facilities and expand services.
