Hospital in Webster is calling it quits
Bay Area Regional Medical Center CEO cites ‘significant hurdles’ in dealing with managed-care companies
Bay Area Regional Medical Center will close early next week and file for bankruptcy, the hospital said Friday. It was the second announced closure of a local hospital in the last six months.
CEO Stephen K. Jones Jr. told employees in an email provided to the Chronicle that the company “was not able to overcome significant hurdles with managed-care companies.” An estimated 900 employees will lose their jobs.
Patient move-outs began immediately.
“This morning local hospitals will be notified so that they can help facilitate the transfer of our patients to their facilities,” the email said. “Local EMS will be deploying resources to help move patients, and doctors will be rounding to discharge patients who can safely go home or to a lower level of care.”
The 191-bed hospital, owned by locally based Medistar Corp. and offers emergency, surgical and a range of other medical services, opened four years ago just a half-mile from the more established Clear Lake Regional Medical Center.
Spokesman Santiago Mendoza said Bay Area Regional tried for at least a year to get better reimbursement terms, but it did not have the backing of a major hospital system.
“When it came to negotiations with our managed care contracts, we were unable to come to an agreement, a favorable agreement, and due to overhead, we couldn’t survive,” Mendoza said.
A statement on the Bay
Area Regional website Friday morning said the company is working with lenders to wind down the operation.
Amy Allen, a respiratory therapist who has been with the hospital since it opened in in 2014, said she felt “totally blindsided” when she received a call from a co-worker on her day off.
“We just had a meeting yesterday that they’re going to open supervisor positions for those of us who have been there for a long time,” Allen said. “I’m a single mother, and for them to do this is awful. I figured people would know ahead of time.”
Employees were informed that their last day will be Monday or Tuesday, she said.
Payroll funds will be available Monday, the email to employees said.
“A determination is being made regarding our benefits plans,” it added.
Jones, who took over as as CEO after the death of predecessor Tim Schmidt of pancreatic cancer in May 2017, said in the public statement that the company had invested $200 million in construction and operation in the last five years.
As late as August, the hospital was talking growth, citing the impending opening of a women’s center.
The closure follows the loss of East Houston Regional Medical Center, which announced in November that it would not reopen after severe damage from Hurricane Harvey in August.
That hospital, owned by HCA Healthcare Gulf Coast Division, had been open for more than 40 years when it was swamped by 6 feet of water in the historic storm and determined to not be salvageable.
The East Houston Regional closure cost more than 400 jobs.
The shutdowns are dramatic, but other local medical facilities also have been hurt of late.
Memorial Hermann Health System, Houston's largest employer, laid off more than 460 employees last year in three rounds of cuts. That amounts to slightly less than 2 percent of Memorial Hermann's 25,000employee workforce.
Also in 2017, MD Anderson Cancer Center laid off 778 employees, and Catholic Health Initiative's Texas division cut 1,295 jobs, most at the St. Luke's Health System in Houston.