Palm Drive, a small hospital, went into bankruptcy, for the second time, because it could not make enough money (including the parcel tax). Over the years, it used borrowed money and tax receipts to stay open. But expenses kept rising, income kept falling, and the debt kept growing until it was forced to close.You can pretend it was mismanaged, but in reality, over the years, the board tried many different approaches to increase profits. Multiple CEO's, management companies, shared ventures, new physicians, new services, and cutting staff were all tried. Nothing made enough profit to cover the rising costs.
Let's just say there was a small restaurant with a lot of local competition and few tables. It did not have enough customers (income) to cover the wages, insurance, utilities, taxes, mortgage, and suppliers. Eventually the debt grew so large that it was forced to close its doors. The local customers missed the restaurant. They felt very comfortable having their morning coffee in that sunny booth, and they wanted it to reopen. The customers formed a committee and had fundraisers to reopen the little restaurant. It reopened with great fanfare, but over time the debt kept growing and once again it was forced to close. After all, nothing could change the facts. It was too small and expenses were too high.
What will happen to Palm Drive in the future? I too, miss that sunny booth. But can anyone really change the facts--too few patients, too many expenses?