[Editor’s Note: Conclusion of a 5-part series, an interview with Stan Otake, CEO of Brotman Medical Center, which filed Chapter 11 bankruptcy proceedings last autumn. See Part 4, “ Brotman Is Exploring Alternative Routes out of a Dark Financial Forest,” May 6.]
No room for gloom when Stan Otake, the Chief Executive Officer of bankrupt Brotman Medical Center, is at his work desk, which is most of the time. Since shortly after stepping in last October, just when the burdened Culver City hospital was seeking legal relief, Mr. Otake says he has placed Brotman on an upward trajectory that he is certain will lead to vindication and success.
Question: Given the pessimistic financial outlook and environment this spring, is this is worst of all possible times for Brotman to be in a serious financial predicament?
“There are lenders out there who have sat back during the crazy period, didn’t get involved in some kind of sub-prime mortgage situation, who are capital rich and are looking for good opportunities.
“On an aggregate basis, it looks like a tight financial marketplace. Nevertheless, there are still large, reliable parties out there who exist to make prudent business decisions.
“People who have scrubbed through the data related to Brotman, despite the recent bankruptcy filing, are willing to put millions on the table from a financing standpoint.”
Question: Where does the selling off of $2.2 million worth of Delmas West property fit into Brotman’s recovery scheme?
“ Taking a look at strategies to get out of bankruptcy, one strategy is to monetize certain assets. Take a look. We are a 420-bed hospital. Things have changed over time. In its 80-plus year history, I don’t know at what point Brotman became a 420-bed hospital.
“But 420 is not what the community needs, and it is not what the hospital can support. Even large institutions like UCLA Medical Center, in configuring a new hospital, downsize.
“Why? It means the community doesn’t need these beds. Because technology has advanced. Ten or 15 years ago, a simple gall bladder removal was a 5- or 6-day stay. Now you can do it on an outpatient basis, and some of that work, unfortunately, is done through surgery centers.”
Question: What would be a comfortable bed-count for Brotman? Half? One-third?
“ My census for the month of March was in the 170-bed range. If Brotman became a hospital with 225, 250 beds, that would be ample for the community.”
Question: And the right size for Brotman to stabilize financially?
“Clearly. In my opinion, we have not needed any more beds than that for the last 7,8, 9 years. Then there is the cost issue of maintaining two physical plants that have been impairing Brotman from an operating standpoint.
“Why did Brotman get into bankruptcy? Some of it relates to servicing two large physical plants. It costs money to keep the power on across the street. It’s an old building to try to maintain.
“We are on the way. Some ideas that have come back from a development standpoint will secure the future of Brotman for years and decades to come.”
