As Insight Medical Health Systems potentially takes over ownership and management of West Suburban Medical Center, there are many questions to be answered, chief among them being just how much cash the shuttered hospital has available to work with.
As Wednesday Journal reported Monday, Insight Health Systems, which is headquartered in Michigan, is currently struggling with financial and regulatory problems related to several healthcare facilities it operates in Ohio, and a reported $9.2 million net loss by Insight’s Southside Chicago hospital in 2025.
Those challenges make it unlikely Insight will bring its own financial assets to West Sub.
Another possible funding source available — besides the unlikely arrival of additional state funding — are from landlord Patlola and West Sub’s backlogged medical services billing, or collectibles.
The corporate entities that Prasad controlled — including AUM Global Healthcare Management, which owned Resilience Healthcare — held substantial, if unrealized, financial resources.
Insight has not disclosed any figures and has declined comment, so any reporting is speculative. But recent court testimony informs that speculation; according to both Patlola and Prasad, West Sub was continuing to bring in substantial sums of cash from previously billed medical services.
The extent of those unrealized finances were suggested in a Sept. 15 court filing by Prasad’s personal attorney, who told the court that Prasad was “actively working to … collect nearly 120,000 overdue claims.” If that 120,000 claim figure is accurate, using conservative average billing estimates, the 120,000 unpaid claims might represent between $90 million and $124 million in possible collections.
However, hospitals have several distinct categories of billing, each with its own set of rules, according to Bruce Elegant.
Elegant is the retired former CEO of Rush Oak Park Hospital. He also taught business administration at the Rush School of Medicine. He stressed that he is speaking from his own personal and professional experience, not for Rush, and that he is not privy to Insight or West Sub’s financials.
“This is back of the envelope figuring,” Elegant said. “I don’t have access to any figures.”
The bulk of any collectibles Insight is able to recover, he said, will be from Medicaid and Medicare. “The vast majority of receivables, north of 65%, will be either Medicaid or self-pay,” Elegant said. Approximately 25% of the remainder is Medicare, and 10% commercial insurance.
Elegant said self-payer billings will be collected at roughly a dime on the dollar, saying, “It’s going to be minimal.” Commercial insurance will likely return even less, because commercial insurance claims can expire.
“Typically, they have a deadline,” Elegant said. “If it’s more than 12 months old, the probability of collecting goes way down.”
That leaves uncollected Medicaid and Medicare billings as the two relatively reliable sources of revenue for Insight to pursue. Medicaid bills are paid by the state at set rates, usually less than what the hospital bills. Elegant said Medicare pays the highest reimbursement rate, approximately 50% more than Medicaid.
The contentions in Prasad’s Aug. 18 letter are supported to a degree by Patlola’s testimony during a May evidentiary hearing for his lawsuit against Prasad, during which he said Prasad was continuing to take in between $680,000 and $700,000 a week after West Sub closed down.
Whatever amounts Insight is able to collect, cash flow will be just part of the equation in re-opening the hospital,” Elegant said. While he declined to speculate regarding any details of how Insight might go about it’s planned re-opening, he did say it would be expensive.
“There’s been a long period of disinvestment in the hospital,” Elegant said. “It’s not just (fixing) elevators. It’s going to need significant capital.”
“You’re talking about tens of millions of dollars needed for re-investment in the hospital.”