CMH was closer to closure than you may think, McLaren keeps doors open

Cheboygan Memorial Hospital has filed for Chapter 11 Bankruptcy, and we're learning more about how close hospital officials were to having to pull the plug completely.

We have more on what the filing means and the hospital's hope they've found the right solution with a potential purchaser.

Cheboygan Memorial Hospital's bottom line was at rock bottom.

"With the economy, we've seen impacts with people with insurance, and use of the hospital has dropped off because of those things," says Jamie McClurg, CMH Board Chairman.

Streamlining, staff reductions, and cutting services like the OB Unit weren't enough and Chapter 11 Bankruptcy had to be filed.

"I look at this as an opportunity, a blank white sheet of paper for Cheboygan, what makes sense for us, what is the best way to optimize care for our community," says Hospital President/CEO Shari Schult.

Flint-based McLaren Health has an asset purchase agreement with CMH and if approved by bankruptcy court, hospital operations will continue in Cheboygan.

CMH lost $20-million in the past 10 years, and $7-million in the past year alone. Administrators knew something had to be done, and done quickly, and the alternative wasn't as pretty as this one.

â??We were looking at 30-60 days of being out of cash to run business, so it would be a rapid wind down of services if we should have to go there, but it's not going to happen," says Schult.

McLaren provided the hospital with a bridge loan to keep the doors open. If the sale goes through, a process that takes 60-to-90 days, Schult says restructuring is likely and some of the 395 health staffers could lose their jobs.

"Weâ??re still grateful that McLaren came through and we're able to keep our hospital going," says Levering resident Nancy Nowitzke.

We reached out to the nurses union and other employee groups to get their reaction but no one returned our calls.

Hospital officials say the community should not see any changes in the services the hospital offers during the Chapter 11 process and business for the community continues as usual.

To view the full press release from Cheboygan Memorial Hospital

click here