
Some speakers yesterday at a public hearing about the fate of troubled Aliquippa Community Hospital openly raised doubts about a plan to sell it to a group of investors.
While no one outright opposed the sale to Commonwealth Medical Center Inc., skeptics demanded information about the group's strategy to make the hospital profitable and questioned whether Commonwealth -- made up of at least two major shareholders in Legacy Health Network, which is currently managing the hospital -- could succeed.
Under Legacy, the hospital's debt has increased and its operating license has been downgraded four consecutive times, putting it in jeopardy.
"If Legacy is going to be part of this new ownership interest, how can you trust what they say?" asked Mary Alviani, a former hospital board member. "If it's the same old plan that they had before, how can you trust it?"
The hearing, hastily called by the state attorney general's office, drew about 50 people to the American Serbian Club in Aliquippa. They included area residents, hospital staff and union leaders.
Reeling from a $22.6 million debt to Chicago-based, high-interest lender Bridge Finance Group and patient counts far below what is necessary to break even, Aliquippa Community Hospital has asked Beaver County Common Pleas Court's Orphans' Division to approve an auction.
A hearing is scheduled for Friday before Judge John D. McBride. The attorney general's office, which oversees nonprofit institutions like the hospital, is tasked with ensuring the assets are sold for a fair price and the sale does not negatively affect health care in the region.
The hospital is under pressure on two fronts. It will lose its license if it doesn't pass a state Department of Health inspection by Feb. 2. And Bridge has declared the hospital in default on its loan, forcing a sale to cut its losses.
In a move that raised eyebrows among the hearing's participants, Bridge indicated it would finance Commonwealth's acquisition and provide a line of credit.
In essence, Bridge would be lending money to pay off a loan to itself. At least two of the new owners in whom Bridge would stake its confidence are part of the current management group that has met with failure. Bridge must approve any sale.
Paul Frey, 60, of Independence, asked whether the ties between Legacy, Commonwealth and Bridge represented any conflict of interest.
"They're buying it from themselves is what they're doing," Mr. Frey said.
"Quite frankly, at this point, they're the biggest interest holder here," Michael Shiner, the hospital's attorney, said of Bridge. "We have to listen to what they have to say."
It is not clear exactly what Commonwealth would do to improve the situation at the facility, which serves an area with many poor and uninsured people.
Mr. Shiner told the audience that Commonwealth hopes to attract new physicians, give them an ownership stake and count on them to draw patients from outside the area, all while maintaining an emergency room.
It was a hard sell for Marcy Tita, 45, of Beaver Falls, a nurse at the hospital for 17 years. She said trying to operate a successful for-profit hospital in a community as poor as Aliquippa was not feasible.
"If I ran my house like this, I'd be living in a cardboard box. Where's the plan?" Ms. Tita asked.
Mr. Shiner said Commonwealth intends to invest $1 million in its strategy. But Dr. Ganapathi Rao Moka, director of the hospital's emergency room, scoffed at that, saying the hospital's monthly payroll alone is between $750,000 and $800,000.
"How are you going to make a for-profit hospital survive?" Dr. Moka asked. "You can't make it. ... How do you think we're going to make money?"
