Sale of Urban Pediatric Hospital, Pandemic Leadership

Client: A 145-year-old leading pediatric safety-net hospital offering a comprehensive range of pediatric specialties and subspecialties, with 188 beds, a Level I Pediatric Trauma Center, and a Verified Pediatric Burn Center.

Distinctive Factor: Managing a bankruptcy and sale through the COVID-19 pandemic.

Situation:  Over three decades, the hospital had been divested by a multinational investor-owned healthcare services company and swept up in the bankruptcy proceedings of two separate parent companies. Facing steep challenges due to a large Medicaid patient base, lack of investment, insufficient liquidity, patient flight, union issues, and a dispirited leadership team, the decision was made to seek protection under Chapter 11 to effect a turnaround and potentially facilitate a sale. The hospital’s private equity owner sought outside expertise to guide them through bankruptcy, restructuring and a sale process.

Engagement: Dreskin served as Interim Chief Executive Officer of the hospital and led a cross-disciplinary healthcare team from a global accounting, tax and business advisory firm, focusing on unifying efforts and clinical and operational priorities while developing a long-term plan for operational and financial success. Dreskin provided leadership for a disillusioned group of providers, rebuilt the administrative and clinical management teams, gained their trust, and bridged the gap between the sale and the longer-term strategies of a potential buyer. Dreskin also consulted with various constituencies, as well as government and regulatory officials, to help shepherd the hospital. Throughout the engagement, the primary concern was providing high-quality care for pediatric patients and their families.

The team collaborated with administrative executives to oversee hospital operations on a day-to-day basis, leading up to the sale. They also reached out to patients, initiated the transition of internal systems, provided weekly updates to the new owners, and managed ACGME (Accreditation Council for Graduate Medical Education) and CHGME (Children’s Hospitals Graduate Medical Education) accreditation and funding issues for one of the largest pediatric medical training sites in the United States, with over 2,000 learners annually.

Dreskin also led efforts to realign organizational structure to the best benefit of the hospital. With a substantial brand value and widespread community support, the hospital was sold to a joint venture between a university and a leading health system, bringing much-needed financial stability. Dreskin also served as an advocate for the hospital, maintaining relationships with both the hospital’s legacy board and the new joint venture board.

The pandemic began just as the sale was completed, which delayed the search for a permanent leadership team. Dreskin led the hospital through the pandemic and resulting public unrest, developed a COVID-19 command center, screening stations and safety procedures, and oversaw continuing hospital operations. Frequent communications were sent to employees and the community regarding the pandemic, its impact on hospital operations, patient care, and employee health and safety. As the pandemic lessened and conditions permitted, the hospital was able to re-focus on the search for a permanent CEO. Dreskin supported those efforts, helped vet candidates, energized senior clinical leaders, and facilitated a handoff of institutional knowledge.

Outcome:

• Successful sale to well-respected health system and non-profit leaders

• Preserved maximum value for creditors

• Hospital positioned to thrive

• Ensured continuity of training for thousands of medical learners and the largest dental residency on the East Coast