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SRMC sister hospital dead

Houston's River Oaks Medical Center ceased operations today, closed by Hospital Partners of America, which also runs Shasta Regional Medical Center in Redding.

HPA said last week it was selling River Oaks and SRMC. It reassured the 1,000 SRMC employees that care and jobs would not be affected.

Today River Oaks' 524 beds are empty and 500+ employees are at loose ends.

River Oaks' real estate is owned by Medical Properties Trust, which was leasing the land and buildings back to HPA. MPT also holds an 82 percent interest in Shasta Regional.

In fact, it's that interest in Shasta Regional plus a cash reserve that will guarantee MPT isn't left holding the bag.

MPT's biggest boss, Edward K. Aldag, Jr., said of the HPA move today: "While we are presently unable to measure the amount of impairment, if any, that we may realize, we are optimistic that our security position with respect to our $6 million in cash, the parent guaranty, and the performance of the Shasta hospital may allow us to avoid negative effects on our financial position and results of operations. We are actively and continually monitoring circumstances as they develop."

As recently as six weeks ago, MPT was referring to River Oaks in hopeful terms:

"River Oaks ... is yet to meet our or HPA's expectations. While we both at this point are disappointed with the performance, the strength of the parent company and their other hospitals, and thus our guarantee, will give HPA the time they need to get this hospital back on projections."

That didn't happen.

SRMC employees might need a little extra reassurance today.

HPA did not respond for comment this morning.

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