Save Metro South Medical Center

Quorum Healthcare is closing down Metro South Medical Center (MSMC) in the City of Blue Island on September 30th, 2019 under what we believe to be false and fraudulent statements.

The employees of MSMC believe our employee rights have been breached according to hospital bylaws, and state and/or federal employment protection regulations. We believe that the State of Illinois regulations and laws have been breached because current hospital ownership has made what we believe to be false or fraudulent statements to both the public and the Illinois Health Facilities and Planning Board.

MSMC has served the City of Blue Island for over 100 years. The hospital provides advanced medical care to babies, children, pregnant women, adults, and the elderly. MSMC is one of the few financially struggling community hospitals that can provide advanced medical and surgical services to our community’s most vulnerable (the poor, senior citizens, and the chronically ill). In addition, MSMC provides primary and surgical care for standard medical problems. MSMC is contributing to the next generation of citizens to serve our community by delivering over 1,400 babies each year. Many of the hospital physicians, nurses, and staff have worked at the hospital for 20-40 years of their professional careers.

Approximately 1 year ago, Quorum announced to hospital employees that due to the financial difficulties at MSMC, the hospital would likely have to close if a credible hospital buyer could not be found. At the time, the nursing staff was so sympathetic to Quorum’s reported financial struggles that they opted not to form a Nurse’s Union in hopes of easing some of the financial challenges for the company.

In June 2019, Quorum announced to the hospital employees, the public, and the State of Illinois (specifically the Illinois Health Facilities and Planning Board) that the hospital did not find a credible buyer and that the hospital would have to close in September 2019. Obviously, the hospital staff was devastated that a credible buyer reportedly could not be found to purchase MSMC and we the staff started to prepare for new jobs and new lives at other hospitals.

We were in shock on August 16, 2019 when a credible buyer (MSMC Management, LLC) communicated in a letter to the Mayor of the City of Blue Island, which was then provided to the hospital physicians and employees, notifying us that negotiations with Quorum had come to a roadblock and would not proceed. (See Exhibit A: Letter from MSMC Management, LLC (credible buyer)).

Furthermore, in the letter from the credible buyer, the following information was disclosed to the city and provided to MSMC employees:

1. Quorum Healthcare had been i active negotiations with a credible hospital buyer BEFORE announcing hospital closure in June 2019.

2. Quorum appears to have intentionally and publically made false statements to hospital employees, the public, and the State of Illinois (Illinois Health Facilities and Planning Board) in order to close the hospital.

3. Quorum continued to negotiate with the credible hospital buyer AFTER announcing the required hospital closure.

4. Although Quorum identified a credible hospital buyer, the company intentionally and systematically closed critical medical services that were needed by the community of Blue Island while successful negotiations were in progress.

5. The credible hospital buyer agreed to pay Quorum’s asking price to purchase MSMC and keep the hospital doors open and immediately began drafting a formal purchase agreement.

6. The legal team for MSMC Management, LLC (credible buyer) spent several weeks and tens of thousands of dollars in legal fees to complete the purchase agreement. As the final contracts were being drafted, Quorum unexpectedly demanded a non-refundable $750,000 deposit to complete the transaction.

7. MSMC Management, LLC felt that such a purchase deposit without reasonable terms was unacceptable. At that point, MSMC Management, LLC (credible buyer) paused contractual negotiations and engaged civic leaders in an effort to bring the requisite pressure needed for Quorum to propose reasonable, bilateral contractual terms.

It is our understanding that Quorum will likely profit in tens of millions of dollars from remaining hospital revenue and tax benefits from writing off bad debt after closing the hospital. This makes no sense, if at the same time, hundreds of employees will lose jobs, the City of Blue Island will lose critical tax revenue, and the most vulnerable (the poor, the elderly, and the chronically ill) in our community will be denied access to medical care close to home.

We believe many false and fraudulent public statements were made by Quorum to hospital employees, the public, and State of Illinois so that the company could profit from closing MSMC. Even If our hospital employees’ rights/laws were breached and violated, we are not looking to be paid for damages. We are simply asking as hospital employees for you to use your position to compel Quorum Healthcare to remove the non-refundable $750,000 deposit stipulation from contractual negotiations so that MSMC Management, LLC can complete the purchase agreement. We hope this action taken by your office will allow the hospital to stay open for another 100 years and provide jobs, critical tax revenue for Blue Island, and quality medical care to everyone in the community.

With the hospital closure to occur in a matter of days, we thank you in advance for your immediate attention to this matter. Quorum’s representative managing the sale, Kenneth King, can be reached at (615) 495-6374 (mobile) or (615) 221-3508 (office). Hopefully you can discuss with Quorum how to resume negotiations and complete the sale with MSMC Management, LLC in order to keep the doors of MetroSouth Medical Center open.

--- Exhibit A ---

August 16, 2019

City of Blue Island
13051 Greenwood Avenue Blue Island, IL 60406

Dear, Mayor Vargas and State Representative Rita.

I want to make both of you aware that my company is in the process of trying to acquire Metro South Medical Centre (MSMC) from Quorum Healthcare. I have created a special company just to acquire MSMC called MSMC Management, LLC.
Starting approximately three years ago and more recently about five months ago Quorum allowed my company to perform due diligence on the hospital. My company has been trying to buy MSMC long before Quorum announced plans to close the hospital. My company has completed due diligence and has agreed to the asking price that Quorum wanted in order to sell the hospital.

Quorum’s lawyers and my company’s lawyers started spending tens of thousands of dollars in legal fees to complete the agreement. During this good faith process Quorum intentionally and systematically has been closing critical medical services (i.e. Cardiac Catherization / Heart Lab, Gastrointestinal (GI) services, Terminating Physician Contracts, etc.), while knowing we were a credible buyer.

Suddenly, toward the end of completing the agreement to buy the hospital, Quorum started making new, onerous demands and the most problematic being the requirement to pay a non-refundable $750,000 in order to finish the purchase agreement.

Quorum is misleading the public by saying there is NOT a credible buyer.

For the acquisition of MSMC, I have organized a team of seasoned experienced healthcare professionals (including myself) that have raised capital to purchase and manage large and small hospitals throughout our healthcare careers.
Furthermore, we secured a financing company that has examined the value of the hospital and is willing to lend the money to purchase the hospital. For reasons that are not clear, Quorum appears unconcerned that hundreds of employees will lose their jobs, the City of Blue Island will lose crucial tax revenue, and force the community’s most vulnerable (the poor, elderly, and chronically ill) to lose access to medical care.

My company wants to buy and invest in MSMC. I am a Board-Certified Emergency Medicine Physician (aka ER Doctor) and have worked in and participated in managing many financially distressed hospitals in Chicago over my 30-year career in medicine.

I am deeply connected to MSMC. I was brought in as part of the previous turnaround team when MSMC announced closure in 2008. In just four years, we turned around the hospital and it sold to (CHS/Quorum) for tens of millions of dollars. I care deeply for this hospital, but I cannot acquiesce to these onerous demands of Quorum, especially while they continue to turn off critical medical services and move equipment out of the hospital.

My company is happy to buy the hospital from Quorum. All we are asking is that they be reasonable in their demands. Any assistance you could provide to work with Quorum to stop turning off critical medical services and have them engage in reasonable negotiations would be greatly appreciated.

Sincerely,

Seth Guterman, MD FACEP
President
MSMC Management, LLC
msmcmgtllc@mail.com