The owner of Weiss and West Suburban hospitals has reached an agreement to move forward with the hospitals’ sale, despite recently filing for bankruptcy.
California-based Pipeline Health has reached an agreement with Resilience Healthcare and Ramco Healthcare Holdings that would see Resilience take over the hospitals’ operations Dec. 2, Pipeline announced Wednesday. That agreement must still be approved by the U.S. Bankruptcy Court for the Southern District of Texas.
A second phase of the sale, expected to close in coming months, would involve Ramco purchasing the real estate associated with the facilities.
Together, Weiss Memorial, in Chicago’s Uptown neighborhood, and West Suburban Medical Center, in Oak Park, employ more than 1,400 people and have more than 450 hospital beds, according to court documents.
The agreement comes after Pipeline, which has owned the hospitals since 2019, filed for chapter 11 bankruptcy in October, throwing the future of the sale into question. A state board first approved the sale to Resilience, for $92 million, in June, and the deal was originally supposed to close as early as Aug. 30.
It also follows years of twists and turns over the fate of Weiss Memorial and West Suburban, and animosity toward their owner, Pipeline, which is a for-profit company.
Pipeline angered community members and leaders, shortly after it bought the two hospitals and Westlake Hospital in Melrose Park. Pipeline initially said it would turn around the three facilities, but then said it would close Westlake just weeks after taking ownership, sparking fears that it had similar plans for Weiss and West Suburban.
Those worries were then stoked when Pipeline agreed to sell a Weiss parking lot to a developer planning to build apartments on the site.
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As part of the sale to Resilience, Pipeline plans to credit $12 million from the Weiss parking lot sale to Resilience to reinvest in the hospitals.
Resilience is a newly created, for-profit company led by Manoj Prasad, whose initial training was as a physician but who has spent much of his career helping to turn around health care facilities, he has said.
Prasad has said he first plans to stop the financial bleeding at the hospitals, and he hopes to eventually bring new services to the hospitals and expand and improve others. He believes the hospitals will be able to save millions of dollars a month by improving their revenue collection and electronic medical records systems, among other things. Patients on government programs such as Medicaid will continue to be welcome at the hospitals, he has said.
New Jersey-based businessman Reddy Rathnakar Patlola is a financial partner in Resilience and will invest in the acquisition and operations. Patlola’s company, Ramco Healthcare Holdings, will own the land on which the hospitals sit, with Resilience entering into long-term lease agreements with Patlola.
Pipeline has said that it filed for bankruptcy after facing rising labor and supply costs, lower revenues and delayed payments from some insurance plans. Weiss and West Suburban posted combined net losses of $69.7 million during the 12 months leading up to August 2022.
