Pipeline Health emerges from bankruptcy protection, touts new leadership

Pipeline Health said this week that it has emerged from bankruptcy protection, and it has a new leader as the organization charts a new path forward.

Pipeline said the U.S. Bankruptcy Court for the Southern District of Texas signed off on the organization’s plan to exit bankruptcy last month. A for-profit system based in El Segundo, California, Pipeline filed for bankruptcy protection in October.

A month later, the system said it had completed the sale of two hospitals in Illinois, a step the organization said was critical to the system’s future. Pipeline had said the financial difficulties of the Chicago-area hospitals were weakening the entire system. WIth the sale of those hospitals, Pipeline is now operating five hospitals, with four in California and one in Texas.

With Pipeline emerging from bankruptcy, Robert Allen now takes over as CEO, the system announced Tuesday. Allen had been serving as Pipeline’s chief financial officer since November 2020.

Allen played a key role working with other system executives, legal experts and business advisors on the restructuring, the system said.

“It’s a privilege to take the helm of Pipeline Health as we begin a new chapter,” Allen said in a statement. “I look forward to a bright future for our four Los Angeles-area hospitals and our hospital in East Dallas as we continue to serve the underserved communities that count on us for care.”

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Pipeline operates four hospitals in the Los Angeles area: Memorial Hospital of Gardena, Coast Plaza Hospital, Community Hospital of Huntington Park, and East Los Angeles Doctors Hospital. The system also operates White Rock Medical Center in Dallas, Texas.

Pipeline sold two hospitals in the Chicago area, West Suburban Medical Center in Oak Park and Weiss Memorial Hospital in Chicago’s Uptown neighborhood, to Resilience Healthcare and Ramco Healthcare Holdings, LLC.

The Chicago facilities lost $69.7 million over the 12-month period that ended in August 2022, according to paperwork filed by Pipeline in the bankruptcy court. The hospitals had been struggling and those difficulties were compounded by higher labor and supply costs in the COVID-19 pandemic, the system said.

Pipeline noted that hospitals nationwide have suffered in the COVID-19 pandemic. Hospitals endured their worst year of the pandemic financially in 2022, according to Kaufman Hall, a healthcare consulting firm. About half of the nation’s hospitals finished in negative margins, Kaufman hall said.

“Pipeline Health was not alone in suffering the impact of the pandemic,” Allen said in a statement. “Hospitals across the country face similar financial challenges. Skyrocketing labor costs and dramatic increases in supply costs have hurt small hospitals.”

Allen said Pipeline would “focus on enhanced workforce management to care for the patients we serve and to enhance our critical relationships with our employees.”

Allen previously served as global group chief executive officer of CHA Hollywood Presbyterian Medical Center. He also previously held positions as chief financial officer at several hospitals.

As Pipeline moves forward, Allen also announced four other executive appointments. The leaders will be taking their roles this month, the system said.

• Steve Blake has been promoted to serve as Pipeline’s chief financial officer. He served as Pipeline’s chief accounting officer, and chief financial officer for the system’s Los Angeles market, for the past six years.
• Vince Green is returning to Pipeline as the chief medical officer. An emergency medicine physician, Green previously served Pipeline as chief medical officer from 2018-22 and then as chief medical informatics officer.
• Patrick Rafferty will serve as chief operating officer for Pipeline’s Los Angeles market. He will also serve as CEO for Coast Plaza Hospital, and he will focus on opening a new behavioral health unit at the hospital.
• Elaine Stephenson has been promoted to vice president for human resources for Pipeline. She joined Pipeline in 2021 as director of workforce planning, and she will now focus on HR operations and employee relations.