A hospital that serves rural Rockingham County has filed for bankruptcy. Leaders at Morehead Memorial Hospital in Eden say competition with larger hospitals has led to a decline in the number of patients it treats.
The hospital started looking for a strategic partner last year, but Morehead's president and CEO Dana Weston said its finances were driving potential investors away.
“The debt was a challenge that we were running into as we were searching for a strategic partner, and that's one of the reasons why our board came to the decision that the best option for us moving forward was to file for the Chapter 11 protection,” Weston said.
Chapter 11 bankruptcy allows the hospital to restructure its debt.
“Reorganization will allow Morehead Hospital the opportunity to align its operations strategically to meet the health care needs of our community,” said Eugene Russell, Chairman of Morehead’s Board of Trustees, in a statement.
Rural hospitals across the country have closed or been absorbed by larger systems in recent years. Morehead's bankruptcy filing lists its liabilities as between $10 and 50 million.
Another reason for the bankruptcy filing: Medicaid reimbursements have been declining. Weston said that disproportionately hurts a rural facility like Morehead Hospital.
“If you combine all of our Medicare, Medicaid and self-pay volume, you're looking at well over half - a good number of our patients - that are requiring some sort of assistance,” Weston said.
State lawmakers voted not to expand Medicaid under the Affordable Care Act.
Weston said the hospital will stay open and will not lay off any employees. Morehead Hospital is still looking for a strategic partner.