Pioneer Health Services, the parent company of Pioneer Community Hospital of Stokes County, has filed for Chapter 11 bankruptcy.
A company officials said she hopes to use the filing to restructure the organization “in order to stabilize operations and insure long-term viability.”
Pam Tillman, who until recently has headed the local hospital and now serves as its assistant CEO, said she is working closely with staff to ensure the best outcome for the hospital.
“This provides some opportunities for the hospital and our county to actually come through this with some positive options,” she said Thursday. “I am working on these options to come up with as many win-win solutions as possible.”
In a memo to the hospital staff she said the bankruptcy process could take one to two years.
“Staff needs to understand that we will continue to get a paycheck during this restructuring,” she said. “It will allow us to keep the vendors we have for our supply base and pay our creditors over time. The ultimate goal is to stabilize the entire organization for a long term successful future for the communities and patients we serve.”
She encouraged the staff, many of whom are also local residents, to hold their heads high and continue to provide excellent care to their community.
In a written statement, the company said it plans to continue doing business through the six companies affected by the filing. Those include Pioneer Health Services Inc., Pioneer Community Hospital Scott, Pioneer Community Hospital Stokes, Pioneer Community Hospital Patrick, Pioneer Community Hospital Aberdeen, and Medicomp, Inc.
The release stated the company has been experiencing a significant change in the healthcare environment over the past few years that has led to a financial strain throughout the organization.
The company points to decreases in reimbursement through high deductible plans, the federal 2 percent sequestration, requirements to invest in an electronic health records system, denials for appropriate hospital stays by insurance companies, delays in payment by those same insurance companies, and other reasons.
Local leaders expressed concern, but cautious optimism over the announcement.
“The board is very committed to keep quality health care in Stokes County and very anxious to meet with Pioneer to see how we can partner with them to keep the best health service possible in the county,” said Stokes County Board of Commissioners member Leon Inman. The county recently reduced the water rate for the hospital to bring it more in line with other water systems in the area and help the hospital deal with its financial burdens. Inman said maintaining health care in the county was a top priority. “It is a huge deal. But, thankfully, Chapter 11 allows restructuring and there are many, many businesses that have filed Chapter 11 and become stronger and more sustainable. It is better to get a call that they are filing Chapter 11 than getting a call saying they are shutting down.”
King City Manager Homer Dearmin agreed.
“I am disappointed to hear this news but I am hopeful they can make some changes that allow them to continue to serve the citizens of King and Stokes County,” he said.
The company has recently restructured how it operates in the King community by closing its emergency room there and opening an urgent care facility in a different location.
In January, Pioneer of Stokes CEO David McCormack said those moves were needed to help the company be more efficient.
“We need healthcare in this community,” he said. “Every community is facing the same issues we are. How can we do what we do under these pressures? We have to do it more efficiently. Nobody knows what tomorrow is going to be, but we want to provide the best care that we can to the people of this community. We want to make sure the people in this community get what they want.”
In January, McCormack said his company has spent the past year looking at how to more efficiently offer the same level of care for the Stokes community, citing the recent decision to convert the King area emergency room into an urgent care facility.
“The cost associated with an emergency room is much higher than the cost associated with an urgent care,” said McCormack. “We are doing the exact same thing it is just the cost is lower for us. It was a really good decision to make.
“We know this community needs the services,” he said in January. “It certainly can support it with what is here. We have the physical assets to do that. We have everything, now it is our responsibility to put those pieces together and make it work. It looks very promising to us. We are in a lot better shape than a lot of communities in similar situations to us.”
Nicholas Elmes may be reached at 336-591-8191 or on Twitter @NicholasElmes.