Washington State Commandeers Bankrupt Rural Hospital

Hospital clinicians pass out masks to be put on before testing patients for the coronavirus at Newton-Wellesley Hospital in Newton, Massachusetts on March 18, 2020. (Photo by JOSEPH PREZIOSO/AFP via Getty Images)
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April 1, 2020 6:04 p.m.
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Washington state officials took control of a recently bankrupt rural hospital to create additional capacity amid the COVID-19 pandemic, as dwindling numbers of rural health care providers brace to face the crisis.

Though the hospital ceased operating due to its bankruptcy in early January, the takeover highlights the risk that rural America faces after a decade of hospital closures in sparsely populated regions around the country.

The state government moved in federal bankruptcy court on Monday to take over Astria Regional Medical Center in Yakima, Washington, citing the COVID-19 pandemic.

Per the filing, “likely a military hospital unit” wanted to commandeer the facility this week in order to create “sufficient capacity to respond effectively to the exponential
increase in infections.”

“Because it is currently a closed facility all its beds can be made available immediately for COVID-19 patients,” the filing reads.

Washington state had the first known community transmission in the U.S., while a nursing home in the Seattle suburbs saw 35 deaths linked to an outbreak.

A federal judge approved the move on Tuesday, one day after filing, allowing a temporary lease on the hospital’s property to go into force between the state department of health and the debtors.

Though the hospital went bankrupt before the virus spread, the decision highlights the measures that state governments are taking to create emergency hospital capacity as ballooning numbers of COVID patients threaten to overwhelm the country’s health care system.

The crisis could be particularly acute in rural America. The need to treat large amounts of patients has forced hospitals to cancel profit-drivers like elective surgeries, depriving rural health care facilities operating on already-tight budgets of a key revenue stream.

At the same time, those tight operating margins have already contributed to 126 rural hospital closures since 2010, reducing rural regions’ capacity to house people afflicted with the respiratory illness.

A declaration attached to the motion said that Washington state officials first identified the shuttered facility as a candidate for reopening on Feb. 26, a month before the decision was made to take it over.

In California, the state intervened in a bankruptcy proceeding last month to open two hospitals in a similar case. The two facilities belonged to a statewide health care system that declared bankruptcy last year.

Both of those hospitals are urban, with one outside San Francisco and another in Los Angeles.

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