The owner of West Suburban Medical Center’s property is ramping up efforts to remove his business partner from the hospital, as more details emerge about the depths of the facility’s financial woes in the months leading up to its abrupt closure.
On Wednesday, Ramco Healthcare Holdings, which owns the hospital property, filed a lawsuit in Cook County Circuit Court asking a judge to appoint a receiver to take control of the hospital’s operations so it can be reopened — a move that’s being supported by the Chicago Medical Society and the hospital’s medical staff.
Now, the hospital is operated by Resilience Healthcare, a company owned by Dr. Manoj Prasad. Resilience filed its own lawsuit about a week ago seeking to stop Ramco from evicting Resilience from the hospital facility. Ramco is owned by Reddy Rathnaker Patlola.
The two men had originally gone in on West Suburban together several years ago, with Prasad’s company leasing the facility from Patlola’s company. Patlola is also a minority owner of Resilience.
“The appointment of a receiver is necessary to protect the public interest as the Oak Park community relies on the prompt reopening of (West Suburban) for essential healthcare services, particularly for its low-income population,” according to the complaint. “Without the immediate appointment of a receiver, there is substantial risk that Dr. Prasad will continue to misappropriate West Suburban’s remaining assets, further deteriorating the West Suburban Medical Center Property and eliminating any possibility of resuming hospital operations.”
Prasad said in a statement Wednesday that the lawsuit is “without merit.”
“The operative lease agreement between the parties, which Mr. Patlola signed, is already before the court in the complaint Resilience Healthcare filed last week,” Prasad said. “That agreement explicitly prohibits Mr. Patlola from terminating the lease or removing the hospital operator. Nothing in today’s filing changes that.”
The Chicago Medical Society and the medical staff of West Suburban have thrown their support behind the request for a court-appointed receiver to take over operations, and is submitting a letter in the case. The Chicago Medical Society is also offering to serve as an intermediary that can help ensure “that the selection of a new operator is conducted with transparency, clinical insight, and accountability,” according to the letter being submitted in the case.
“This request is not made lightly,” according to the letter. “It is made out of urgent necessity to protect patient safety, preserve access to essential healthcare services, and restore public trust in a critical community institution.”
The new lawsuit comes about a week after Prasad said he was restarting some outpatient and clinical services at the hospital. Prasad has said he hopes to reopen the hospital this summer.
Local leaders, however, have raised questions about Prasad’s ability to resurrect West Suburban.
Adding to those questions are the findings of a state-backed review of West Suburban, from about five weeks before the hospital’s closure. The Tribune obtained a copy of a report about the review through a Freedom of Information Act request. WLS-Ch. 7 first reported on the details of the review Tuesday.
The review revealed that the “West Suburban leadership team has not, and likely cannot, develop an operating or strategic plan to remedy the severe financial conditions the organization faces.”
The preliminary review also found that, at the time of the review, the hospital had no cash reserves, significant debt and was missing key leaders such as a chief financial officer and chief information officer.
The review was conducted by consultants with Health Management Associates on behalf of the Illinois Department of Healthcare and Family Services after the hospital “requested assistance from the state to avoid closure,” according to the review.
Investigators warned that, “Without a viable financial stabilization strategy, any financial relief provided will only serve to partially meet short-term obligations rather than the necessary runway to implement a financial stabilization plan.”
According to the review, West Suburban “lacks a documented, realistic data-driven strategy to stabilize operations or rebuild service lines.” They also wrote, “Finance team lacks basic cost accounting, budgeting, and revenue cycle capability.”
A spokesperson for Ramco said in a statement Wednesday that the review’s findings “reinforce what we’ve been saying — there is no realistic path for the current operator to safely reopen West Suburban Medical Center.”
“Our focus is on securing a qualified new operator who can quickly restore care and ensure long-term stability for the community,” the statement said.
A spokesperson for Prasad said in a statement Wednesday that West Suburban “welcomed the review” and cooperated with the reviewers.
“The report confirms what we have said which is that the failed (electronic medical record) system caused revenue collection issues,” the spokesperson said in the statement. “The hospital has since resumed outpatient services and is working toward a full reopening in July.”
