Astria Regional Medical Center in Yakima closing in a matter of weeks

YAKIMA, Wash. – Astria Regional Medical Center (ARMC) will be closing in Yakima amid ongoing financial troubles, the hospital’s parent company announced Wednesday.

Astria Health filed for Chapter 11 bankruptcy protection in May 2019. At the time, the company said there was “no plan to close facilities.”

As the company prepares to emerge from Chapter 11 early this year, the company says lenders and investors have shown interest in supporting the company’s Sunnyside and Toppenish branches by refinancing the debt associated with them. Those branches will remain open for the foreseeable future.

However, Astria Health says that interest is lacking for the Yakima branch.

On Wednesday, ARMC received authorization from the United States Bankruptcy Court for the Eastern District of Washington to begin the process of closing.

“It is with deep regret that we have to make this announcement,” said John M. Gallagher, President and CEO. “We have worked diligently to sustain the Astria Regional Medical Center hospital and to avoid closing it, but healthcare industry delivery models continue to shift from inpatient care to outpatient models and due to its continued operating losses, lenders have no interest in refinancing the debt associated with Astria Regional Medical Center.”

Gallagher said closure is, therefore, necessary as no other feasible option is available.

“We want to assure our patients that Astria Health’s highest priority remains their care and we are working closely with other Astria Health Hospitals and with other local providers on their behalf,” he said.

Inpatient services at Astria Regional Medical Center will begin winding down immediately, and it is anticipated that within approximately the next two weeks patient services will cease at the hospital.

Astria Health has continued to fund substantial ongoing financial losses, but ultimately the hospital’s continued financial losses proved unsustainable, the company said. Since purchasing the ARMC in late August 2017, the hospital has lost over $40 million.

Struggling hospital finances are not unique to ARMC, due in part to the nationwide shift in the healthcare delivery models from inpatient care to outpatient care. Astria sought lenders that would provide additional liquidity to ARMC, but were ultimately unsuccessful.

Similarly, Astria Health has sought to sell ARMC or partner with nearby hospitals, all in an effort to continue providing healthcare to the community, and these paths were also not successful.

Finally, Astria Health requested government assistance from the State of Washington, including intervention to save the hospital, but without success.

ARMC has struggled with declining patient volumes and declining revenues for some time, and despite investigating various scenarios to sustain the hospital’s inpatient hospital services, ARMC was unable to develop a profitable model based upon patient needs.

“While Astria Health’s other hospitals collectively generate significant positive cash flow, funding ARMC’s continuing financial losses was placing too significant a financial drain on the overall organization,” the company said in a news release. “Continued funding of ARMC jeopardized the long-term sustainability of Astria Health and the region’s other healthcare facilities, including Astria Sunnyside Hospital and Astria Toppenish Hospital, as well as healthcare delivery for the Yakima Valley as a whole.”

Astria Health is adapting its healthcare delivery model in the Upper Valley to an ambulatory care model and will continue to
provide outpatient care to the Yakima area.