New leaders of financially troubled Jackson Hospital & Clinic in Montgomery said the hospital might close unless the city of Montgomery guarantees $20.5 million of its debt.

At a news conference Thursday outside the hospital, interim CEO Ron Dreskin said Jackson has arranged a financing plan with its bondholders that would keep Jackson open while it makes operational changes that are needed.

“However, part of the agreement that we have made requires the city of Montgomery to give a guarantee,” Dreskin said.

“I want to make sure everyone is clear. We are not asking for a dollar of funds from the city of Montgomery. But we are asking them to guarantee the financing that we require to get us through the next period of time.

“If we fail to get the guarantee, it’s going to be very difficult to get the cash we need to go forward. That’s why we’re here today. That’s why we’ve been meeting with our elected officials to explain to them the dire situation we are in, to plead with them to provide not money, but a guarantee.”

Last year, Jackson Hospital defaulted on about $60 million in bonds.

In November, the hospital announced changes in its leadership, bringing in Dreskin as CEO and Allen Wilen as chief restructuring officer.

During Thursday’s news conference, dozens of hospital employees held signs saying “Save Jackson,” “Save our Community,” and “Save our Jobs.”

The hospital, one of three in Montgomery, has about 2,100 employees.

Tynsley Morris, a registered nurse who works in labor and delivery, held a sign that read, “Protect Patients, Keep Jackson Open.” She said Morris is vital to Montgomery and the surrounding area because of the quality of care.

“Our unit is like family,” Morris said. “I think that’s real important in your healthcare, is that you want to know that the people that are taking care of you, they’re taking care of each other. And we’re doing that. We take care of each other. They are my family, 100%.”

Morris said she does not think Montgomery’s other two hospitals, Baptist South and Baptist East, could absorb the loss of Jackson.

“That is a patient safety issue,” Morris said. “It’s a big issue that the city and the state should really focus on because we’re putting everybody at risk.

“Not only that, we have thousands of jobs here, people who rely on this every day.”

The Montgomery City Council is expected to consider the resolution to guarantee part of Jackson Hospital’s debt on Friday. Several members of the council spoke at Thursday’s press conference and promised the employees they would support the plan.

“Jackson Hospital is a critical part of Montgomery’s healthcare system,” City Councilwoman Marche Johnson said. “It’s in everyone’s best interest if a pathway forward to remain open can be found.”

Johnson said Jackson Hospital is important not only to Montgomery, but to Prattville, Wetumpka, Pike Road, and other nearby cities and counties.

Johnson said that while she believes the city council is ready to help Jackson, she said a more long-term solution for Jackson and other financially struggling hospitals will take a broader effort, including the involvement of state government.

Alabama is one of nine states that have not expanded Medicaid as allowed under the Affordable Care Act.

Advocates for Medicaid expansion say it could help keep hospitals open and protect access to care because it would cover hundreds of thousands of uninsured Alabamians, including many who work at jobs that don’t provide insurance.

Read more: What is the ‘coverage gap’ in Alabama Medicaid, health insurance?

“Our state must take action to close the insurance coverage gap,” Johnson said “We must come together as a community and call upon our state leaders to wake up and take action. It’s long overdue.”

Dreskin said Jackson’s financial problems were partly the result of pressures faced by most hospitals, including increased costs, the pandemic, poor reimbursement rates, the large number of uninsured patients in Alabama, and the difficulties of being a stand-alone hospital.

Wilen, the chief restructuring officer, also said the hospital’s problems were the result of poor guidance by previous management. He said efforts are under way to improve operations and efficiency.

Wilen said if the city does not approve the resolution backing the hospital’s debt, the options will be limited.

“Number one, we may need to shut the hospital,” Wilen said.

“Number two, I am also working on other alternative sources of financing that don’t require the guarantee but put a lot more pressure on the process here and on the restructuring overall than if we have the guarantee in place.”

Wilen said if the city agrees to back the hospital’s debt, it is unlikely the city would have to step in and bail the hospital out.

“I’m not asking for a check,” Wilen said. “I’m asking for a guarantee which has the likelihood of being called to be minimal. But it provides third parties who are not in this community the understanding that this hospital is important to this city, the county, and the community as a whole.”

Morris said she is optimistic that the city council will approve the resolution to save Jackson Hospital, which has operated in Montgomery since 1946.

“I hope with my whole heart that the city does what I think that they will do,” Morris said. “I think they will back us up. It’s super important. We’re such a big part of the community.”