The distressed St. Alexius Hospital in south St. Louis could emerge from bankruptcy under new leadership.
Last week, hospital owner Americore named emergency room director Dr. Sonny Saggar as St. Alexius’ new CEO.
Earlier this month, U.S. Trustee Paul Randolph recruited Florida-based accountant Carol Fox to take over Americore. Randolph said in court documents that Americore CEO Grant White was untrustworthy and had mismanaged the finances of St. Alexius and other hospitals.
Americore and St. Alexius filed for bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Kentucky in late December. It’s the hospital’s second bankruptcy filing in two years.
Saggar said the new leadership will give the hospital a fresh start and allow it to make plans to cut spending and stay afloat.
“We were in a position where we had to work hard to survive more than anything else, and hopefully that’s turning the corner now,” he said. “I saw a glimmer of hope, and that glimmer is getting brighter and brighter.”
Americore bought the hospital after its previous owner, Promise Healthcare, filed for bankruptcy in 2018. High interest rates and a lender backing out of a financing deal shortly after Americore purchased the hospital led to the company taking on more debt, Saggar said.
In 2018, St Alexius had $5.6 million in “bad debt,” from customers not paying their medical bills, said Karen Roth, director of research at the St. Louis Area Business Health Coalition, which tracks financial data on the region’s hospitals.
An Americore employee said during a court hearing that St. Alexius had to decide between paying the hospital’s 400 employees “or buying supplies and medications,” according to court documents. Payroll had been delayed three times in the past year, Saggar said.
“Essentially, [the hospital] was living like a person who lives paycheck to paycheck but still can’t afford the rent,” he said.
Chapter 11 bankruptcy allows the hospital’s management to rearrange its finances without having to immediately pay off debt, he said.
Fox, the trustee assigned to Americore, has experience managing health care bankruptcies, according to the website for her employer, financial services firm GlassRatner.
Saggar is working with a management team to cut hospital costs. He says it’s possible St. Alexius could shut down a department, but he has no plans to lay off any of the hospital’s employees.
Founded 151 years ago, St. Alexius is the oldest hospital in St. Louis. In the past few decades, it’s repeatedly changed hands among for-profit hospital managers, Roth said.
Unlike other hospitals in the region, St. Alexius is a standalone hospital without the large coffers of a system such as Mercy or BJC Health, she said. That means many wealthier patients go to other more well-financed hospitals in west St. Louis County and the city’s central corridor.
“Often, the hospitals that aren’t included in these health care systems will struggle to attract patients to their hospital, because of the overall wealth of the hospital systems because of all the marketing and services they can offer,” she said. “That leaves smaller hospitals out.”
St. Alexius is in Dutchtown, in an area where about 30% of people live below the poverty line. It’s also the most densely populated in the state, said 20th Ward Alderwoman Cara Spencer.
Many neighbors have complained about the hospital and its reputation, she said. St. Alexius has been plagued by a rash of bad publicity, such as when a group of kids sneaked in and shot a video that contained sensitive patient information. In 2017, the hospital found that a St. Alexius nurse was working without a license.
Close to 50% of St. Alexius patients do not have insurance, and many are covered by Medicare or Medicaid, said hospital officials.
Spencer hopes the hospital can stay open for the benefit of patients who have nowhere else to go.
“They are providing health care to people who otherwise might not have access to it, and so they do play a critical role here,” she said.
Saggar, the new CEO, also operates urgent care clinics downtown and in north St. Louis. He said he’s drawn to patients who need help the most, and saving St. Alexius is part of that mission.
“This hospital has tremendously unexploited assets,” he said, adding that it needs to be better managed. “It has so much potential … if they would just use it right, it would have the ability to sustain itself. I believe that we now have a team that can make that happen.”
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