Hospitals’ Bankruptcy Fueled By EMR Complications

In theory, after they get through their growing pains, hospitals should be able to leverage EMRs and new billing systems to improve their financial condition.  In the following case, however, the installation of these new technologies seem to have been the straw that broke the camel’s back.

A group of New York hospitals is $200 million in the red, and owes debts to about 3,000 creditors, a fact which came out in the hospitals’ recent bankruptcy filing. Sound Shore Medical Center of New Rochelle, Mount Vernon Hospital and five related entities have only $159.6 million in assets, according to the Healthcare Renewal blog.

Rather than go out of business completely, the hospitals have found a savior in Montefiore Medical Center, which is offering to buy the group for $54 million plus furniture and equipment.

What’s interesting here isn’t another sad hospital bankruptcy, which are all too common these days, but the reasons for the hospitals’ unfortunate financial condition.

One cause is financial bleeding which began way back in 2006, when the hospitals began seeing falling patient volume and a negative change in their case mix.  In recent times the hospitals have been seeing “significant” losses, negative cash book balances and bills  paid more than 225 days late, the blog notes.

All of that being said, the real kiss of death seems to have come in 2011, when the hospital did an EMR and billing system conversion.  Rather than helping matters, the conversion “caused major delays in billing and cash collection that still haven’t been fully solved” two years later.

I didn’t write this story up to trash EMRs or billing system  upgrades, of course. But it is worth noting that EMR installations aren’t just an expense, they’re a threat to a hospital’s financial well-being if things don’t go well.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.


  • So was it the EMR or the billing system as both were replaced? Was it the implementation or the product? How much was the inevitable bankruptcy accelerated by the decision?

    At a time when you get more clicks by presenting putative evidence against the EMR this seems like a particularly transparent post.

  • I agree with the comment by Wes that the EMR / AR system was not the culprit as much as the straw that broke the camels back, perhaps the headline could have been Don’t Build your EMR ON A BED OF SAND
    Most EMR’s are deficient in the area of support for mobile devices but healthcare enterprises still buy them
    It could be that the rush to achieve meaningful use and those meager financial benefits was a prime consideration and not the how or when or what manner to adopt or deploy a EMR

  • Hospitals have to be run like any other regular business. EMRs are not the solution to overcoming or battling hardcore business issues such as changing patient mix, dropping profit margins and lack of good expense control. As stated by the others, EMR deployments can just emphasize and expedite hospitals going into bankruptcy. Having said that, I truly believe that without EMRs and an integrated Health Enterprise Information Platform it will be hard to survive as a hospital in the upcoming years. However, this requires a thorough roadmap to deploy HIT over time, supported by ROI calculations and accompanied with a solid marketing plan.

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