Auburn Memorial Hospital recently filed Chapter 11 in an effort to restructure its finances.

It is reported that AMH has accrued as much as $7 million in debt, not including more than $13 million owed to employee pension plans.

AMH had reduced pension payments, presumably, to compensate for operational loses of the 2004, 2005 and 2006 fiscal years.

The hospital also hired a consulting firm to assist in its financial restructuring. The consultants hoped to implement a plan to save the hospital between $6 and $7 million per year and predicted revenues and expenses to break even in 2007.

But are there guarantees?

Board officials have insisted that the reorganization will not impact the pensions of employees or retirees.

But bankruptcy, though perhaps the best option at present, should never be applauded as a good thing.

Operational improvements will put the hospital on the right path, but the long term outcome also depends on factors outside of hospital control.

For example, bankruptcy law prohibits the hospital from paying any pre-Chapter 11 debt without court approval. (Ironically, one of the few motions contested to date is how funds are to be disbursed to the consulting firm behind the AMH restructuring plan).

This creates an atmosphere of uncertainty for employees and the community.

Apart from being the closest emergency care facility for many rural families, AMH is also a major local employer. If the existing plan fails, many local health care professionals will be left unemployed and without pension. Despite reassurances from hospital officials, as the courts are ultimately responsible for how the debt will be repaid, it is impossible for the hospital to guarantee anything beyond hope for the best case scenario.

AMH recently reported that the hospital was in the black for the first four months of 2007. Court motions have also been approved permitting AMH to make refunds for over-payments made by patients, to pay out employee wages, and to maintain trust fund accounts for patients at The Finger Lakes Center for Living.

As there has been no immediate shift in patients or staffing, one has reason to be optimistic that AMH will recover from this bankruptcy.

In the meantime “business as usual” seems to be a popular refrain. But until the hospital actually emerges from this Chapter 11 proceeding, I imagine there is no such thing as “just another day at the office.”

Estabrook's column appears Monday in The Citizen, and she can be reached at estabrookcarole@yahoo.com