In November 2012, South Wind Hospice filed for Chapter 11 bankruptcy. It was not a measure anyone associated with the non-profit organization wanted, but it was required by UMB Bank, which holds the Industrial Revenue Bonds issued for construction of the $300 million hospice house in 2005.
"We kept trying to negotiate with UMB, and they gave us time, but not enough time," said Ginger Goering, who "inherited" the job of executive director in 2010, after the hospice began defaulting on bond payments, and after it was discovered that employee payroll taxes had not been paid for the entire year of 2009.
As part of its reorganization plan, the hospice has arranged for a traditional mortgage from a local bank with a $10,000 a month payment that is "very doable," Goering said. This is a reduction from the $32,000 monthly payment originally set up, with the intention that the bonds be paid off in 10 years.
Moreover, the Internal Revenue Service tax lien that at one time topped $300,000 has now been reduced to $80,000, plus interest and penalties, and regular payments are being made.
All current bills are being paid — there is no new debt, only old debt that Goering said she is working hard to reduce.
"We have an organized plan to go forward," she said. "I believe strongly that we can make it."
She does regret that bondholders will not receive full value for their investment — 40 cents on the dollar was the figure proposed by UMB.
In late January, Dennis C. Meyer, Olathe, who bought about $20,000 in bonds, visited the facility, having just been notified that bankruptcy proceedings had begun.
"He was amazed it was lovely, busy and that we were taking care of business," Goering reported.
Meyer suggested, however, that the hospice would be better served by reorganizing as a not-for-profit affiliate of Pratt Regional Medical Center, a position he reaffirmed in a letter to the Tribune on Feb. 25.
"This affiliation would allow SWH to engage in economies of scale with the medical center, sharing such things as accounting and billing functions, human resources and personnel overhead, employee health insurance and costs of medicine and medical supplies," he wrote.
Meyer concluded with, "South Wind is a much-needed organization with an excellent hospice team."
There has been no discussion by the South Wind Hospice board regarding an affiliation with the hospital, nor has the hospital expressed any interest, yet the rumors persist, according to Goering.
"We have had no discussions to that nature," said Susan Page, president and CEO of PRMC, adding, "that is not on our plan list."
Goering, who worked part time for the hospice as a social worker, accepted the director's position in 2010. Since that time, the agency has made significant changes in the way it does business, in order to pay its bills. First on the list was selling the office building on Main Street and consolidating all operations at the hospice house in the Prairie Parkway Business Park. They dropped five northern counties from their service area, and reduced staff, some by attrition and some by combining positions.
Page 2 of 2 - Her next task was to work on substantial debts to vendors. That has been reduced significantly, a necessity in order to continue doing business. When she started, the list of vendors owed money was three pages of single-spaced type. Today it is "about this long," she said, holding her thumb and forefinger about three inches apart.
Unpaid employee taxes have been reduced significantly, and since she took over, the hospice has never missed a tax payment.
While 96 percent of South Wind's revenue comes from Medicare, donations and memorials have always been important, allowing the agency to provide services even if a patient cannot pay. In 2010, the annual auction brought in $30,000, the first time that had happened in several years, and donations have nearly doubled every year since.
During the recent snowstorms, volunteers helped with snow removal and some staff members stayed over five nights to make sure they would be there to take care of patients.
"I know people care about this hospice, and I know they appreciate the service it provides," Goering said. "It's pretty tremendous to have that kind of backing in our community."