Just over a month after a regional health network opted out of buying Johnson Memorial Hospital, a hospital official says four prospective buyers have come forward.
Peter J. Betts, interim president and chief executive officer of the hospital, spoke about the potential buyers — but didn’t name them — during a community meeting about the hospital’s future that was held Tuesday at Somers Town Hall. It was the second of three planned meetings in area towns.
Last month the Eastern Connecticut Health Network, citing a number of financial reasons, terminated its $65 million agreement to purchase Johnson Memorial Hospital, which last November had filed for Chapter 11 bankruptcy protection. During two rounds of layoffs in 2008, the hospital eliminated more than 150 positions.
Besides announcing that four buyers have come forward, Betts also told the audience of about 15 people that Johnson Memorial has hired 13 physicians and invested $1.2 million in new technology and equipment.
In talking about the potential buyers, Betts said that they have “come in to kick the tires.”
“The fat lady is on stage, but she hasn’t sung yet,” he said of a possible deal.
The hospital may have a deal within the next few weeks, said Amy Krysiewski, a spokesman for Johnson Memorial.
Betts, who is part of a management firm that specializes in turning companies around, said that his team came in and did a one-month evaluation of the hospital. At the time, the corporation had only $175,000 in cash, enough to operate the hospital for a day, and about $85 million in debt, he said.
Through some recommendations that involved renegotiating insurance contracts, improving billing, and having in-house service for food and housekeeping, the hospital now has about $4 million in cash, he said.
While Johnson Memorial Hospital wants a buyer, it’s not in a hurry to find one, he said.
A buyer, which Betts labeled “a partner,” would be advantageous in many ways.
Having a strong partner would allow the hospital to leverage better insurance contracts, gain access to capital for equipment, and even save money through integration of supplies and bulk discounts, he said.
Through recent insurance negotiations, Betts projects an additional $5.5 million in revenue each year.
By hiring internal housekeeping and food service, not only was $1 million saved but meals have also gotten better, he said.
“I’m putting on weight,” he said.
Johnson Memorial Corp. owns not only the hospital but nine entities, such as Evergreen Health Care Center and Johnson Health Care Inc.
One audience member mentioned the possibility of selling off some of these entities. Betts said that would not be advantageous because it would appear less attractive to buyers.
The hospital is different from other larger ones because it’s so community based, and the employees are neighbors and friends, Betts said.
The hospital is here to stay and “we will be here to care for your great-great-grandchildren,” he said.
