The board of Palm Drive Health Care District, which runs Palm Drive Hospital in Sebastopol, Calif., has approved the hospital to file for Chapter 9 bankruptcy, according to a Press Democrat report.
The cash-strapped, public-owned hospital expects to run out of money by the end of this month, according to the report, and has been unable to pay vendors regularly. If Palm Drive Hospital files for bankruptcy, it is likely the hospital would close, leaving the area without an emergency department and other inpatient care.
Marsha Sue Lustig, a Palm Drive board member, told The Press Democrat it is unlikely Palm Drive Hospital can turn the corner in only a few weeks. "The reality is that the likelihood of an arrangement coming together in time so that the hospital doesn't have to close on April 28 is almost impossible," she said.
On Monday, executives notified employees of possible layoffs, affecting at least 50. That came about two months after the hospital laid off or reduced work hours for 40 others.
Palm Drive Hospital is licensed for 37 beds but is only staffed for 12. Since last July, the rural hospital has lost more than $1 million due to large declines in inpatient admissions, reductions to Medicare and Medicaid payments and competition. In 2007, the hospital filed for bankruptcy and exited the process three years later.
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