| Notes |
Started 2010: http://www.bizjournals.com/philadelphia/stories/2010/01/04/daily58.html
http://www.abfjournal.com/articles/mission-driven-restructuring-lower-bucks-hospital/
A new chief executive, Al Mezzaroba, was brought in to run the hospital. He is someone who understood not only the importance of managing the profitability and cash-flows, but also the impact of managing through the political and personnel issues. This is critically important when dealing with an entity that generates a significant portion of its revenue from government agencies and regulatory sources as well as dealing with multi-union, complex negotiations in a contract renewal year, all while going through a formal Chapter 11 restructuring.
Some of the steps taken by the turnaround team, but certainly not an all-inclusive list, included:
Froze the pension plan in 2009 to create additional liquidity for hospital operations.
Developed pension termination alternatives and negotiated with the Pension Benefit Guaranty Corporation (PBGC) a termination of the hospital’s underfunded defined benefit pension plan, the complexities of which would lend itself to an entire article, and covering it in one bullet point doesn’t do it justice.
Negotiated with the indenture trustee for LBH bonds effectuating a forbearance agreement & restructuring alternatives.
Preserved the hospital’s value and ability to serve the community.
Increased cash-flow by obtaining grants and funding that laid the foundation for the turnaround.
Reduced operating costs by enhancing inventory management and reducing headcount of non-essential staff.
Worked with trade creditors to gain their support through the Chapter 11 that enabled the hospital to obtain the goods and services needed to treat its patients.
Renegotiated contracts.
Created a new structure that enabled LBH to recruit local doctor groups.
Eliminated service lines with limited to no profitability.
Renegotiated the collective bargaining agreement which reduced overall labor costs and created more flexible work rules.
Preserved more than 1,000 jobs and now serves approximately 70,000 patients annually. |