Astria Health closing Yakima hospital in bankruptcy deal

Sunnyside, Toppenish hospitals to remain open

Astria Regional Medical Center in Yakima is closing this month.  

Its parent, Astria Health, announced that it failed to secure new financing for the 214-bed hospital this month as part of a larger bankruptcy deal that keeps hospitals open elsewhere in the Lower Yakima Valley. 

The closure affects 463 employees, according to a notice filed under Washington’s Worker Adjustment and Retraining Notification or WARN act. Layoffs began Jan. 13. 

Astria’s 38-bed Sunnyside Hospital and 63-bed Toppenish Hospital will remain open after Astria reached an agreement with creditors to continue supporting the smaller facilities. 

Judge Whitman L. Holt signed an emergency order on Jan. 8 that authorizes Astria Health to begin closing the Yakima hospital immediately. The order became public when Holt refused Astria’s request to seal it to keep sensitive operating information private.  

Astria Health sought to protect the three hospitals from creditors when it filed more than a dozen petitions under Chapter 11 of the U.S. Bankruptcy Code in May.  

The cases are being jointly administered in U.S. Bankruptcy Court for Eastern Washington.   

In its petitions, Astria Health listed between $100 million and $500 million in debt.  

It expects to emerge from bankruptcy this year. It previously missed a deadline to wrap up the case in 2019.   

Astria said it was forced to close the Yakima hospital after efforts to secure new lenders or a buyer failed. It said it requested assistance to preserve the hospital from State of Washington but did not receive it. 

It will work to place employees at other Astria locations.  

Astria is working with Virginia Mason Memorial, the other hospital in Yakima, to transfer patients, according to the Yakima Herald-Republic. 

Inpatient services at Yakima began winding down as soon as the order was signed. The hospital is expected to stop serving patients by the end of the month.  

The closure plan calls for Astria to cooperate with the Washington State Department of Health and other entities to ensure patient safety.  

The closure order outlines the plan to halt new inpatient admissions and to secure hospital equipment, waste and medications.  

It covers the transfer, discharge and referral of patients, communication to employees, patients, partners and the community, the safeguard, transfer storage and disposal of medical records, the disposal of pharmaceuticals including controlled substances, the disposal and handling of medical waste and coordination with emergency medical services.   

Astria must remove “Medical Center” road signs leading to the hospital.  

Astria said it lost more than $40 million at the Yakima hospital since purchasing it in late 2017.  It blamed the losses on declining patient volumes and the nationwide shift to less profitable outpatient care.   

The losses in Yakima threatened the financial health of Astria Health’s network of health care facilities in the lower Yakima Valley, where it operates several dozen facilities spread between Yakima and Prosser.  

It treats 346,400 patients annually, including more than 7,300 who spend at least one night in a hospital. 

Astria Health is represented by attorneys James L. Day and Thomas A. Burford of Bush Kornfeld LLP of Seattle and by Samuel R. Maizel and Sam J. Alberts, of the Los Angeles and Washington, C.C. offices of Dentons US LLP.  

Astria also retained Kurtzma Carson Consultants LLC as its communications agent. Astria Health bankruptcy information is posted online at kccllc.net/astriahealth.  

 

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