Part­ner­ships are a sur­vival strat­egy for ru­ral hos­pi­tals

Walker County Messenger - - Front Page - By Andy Miller

Seek­ing part­ner­ships is a sur­vival strat­egy for ru­ral hos­pi­tals

“Look­ing for a part­ner’’ seems like a theme best suited to a high school dance or a dat­ing web­site.

That phras­ing, though, is in­creas­ingly used in health care to de­scribe fi­nan­cially strapped hos­pi­tals’ ef­forts to seek a com­bi­na­tion with a sys­tem that has a bet­ter bot­tom line.

Hos­pi­tals in metro At­lanta, Sa­van­nah, Colum­bus, Milledgeville and else­where have re­cently ex­plored forg­ing such part­ner­ships to boost their for­tunes.

The lat­est hos­pi­tal to ex­press that sen­ti­ment is in Toc­coa, in north­east Ge­or­gia. There, the Stephens County Hos­pi­tal Author­ity re­cently ap­proved con­sid­er­ing a pos­si­ble part­ner­ship or sale of the 96-bed hos­pi­tal.

Stephens County Hos­pi­tal lost $4.5 mil­lion in the fis­cal year end­ing Sept. 30, ac­cord­ing to the Amer­i­can Hos­pi­tal Di­rec­tory.

Lynne An­der­son, ad­min­is­tra­tor of Stephens County Hos­pi­tal, said Mon­day, Aug. 14, that all part­ner­ship op­tions are on the ta­ble. “We’re just out there test­ing the mar­ket,’’ she said. “We’re just start­ing the ini­tial work.’’

Ru­ral hos­pi­tals in Ge­or­gia have run into con­stant fi­nan­cial trou­ble in re­cent years. The rea­sons have in­cluded lower re­im­burse­ments from Medi­care and Med­i­caid; dif­fi­culty in re­cruit­ing physi­cians; in­abil­ity to make in­fras­truc­ture im­prove­ments; and a de­creas­ing num­ber of pa­tients.

Ex­perts also note that Ge­or­gia, like 18 other states, has de­cided not to ex­pand its Med­i­caid pro­gram un­der the Af­ford­able Care Act.

Ex­pan­sion would turn many unin­sured peo­ple into pay­ing pa­tients, which would in­crease the rev­enue of hos­pi­tals that treat them. Many such hos­pi­tals are in ru­ral ar­eas.

Six ru­ral hos­pi­tals have closed in Ge­or­gia since the be­gin­ning of 2013, though two of them have re­opened as down­sized fa­cil­i­ties.

(Edi­tors note: Hutch­e­son hos­pi­tal, in Fort Oglethorpe, closed in De­cem­ber 2015 and re­opened as Cor­ner­stone Med­i­cal Cen­ter)

Stephens County Hos­pi­tal, in con­junc­tion with a con­sult­ing firm, is also pur­su­ing fi­nan­cial turn­around ini­tia­tives. Those in­clude im­prov­ing clin­i­cal doc­u­men­ta­tion and pay­ment col­lec­tions, and re­duc­ing how long pa­tients gen­er­ally stay, An­der­son said.

She said the hos­pi­tal’s fi­nan­cial losses have con­tin­ued in re­cent months.

“We are the only in­de­pen­dent hos­pi­tal within a 55-mile ra­dius,’’ she added.

Jimmy Lewis of Home­Town Health, an as­so­ci­a­tion of ru­ral hos­pi­tals in the state, said, “Any ru­ral hos­pi­tal that is cash­starved is search­ing for any or all op­tions.’’

He said a ru­ral hos­pi­tal needs a pop­u­la­tion base of 40,000 peo­ple to sus­tain oper­a­tions, with­out a ma­jor county sub­sidy or other source of fund­ing.

“All ru­ral hos­pi­tals need to do a self­ex­am­i­na­tion,’’ Lewis said.

The best op­tion for a hos­pi­tal such as Stephens County to re­main open “is to find a buyer or merger part­ner to help with pa­tient re­fer­rals, cost syn­er­gies, and nec­es­sary in­vest­ment,’’ said Greg Charleston, se­nior manag­ing di­rec­tor and leader of the At­lanta re­gional of­fice of Con­way MacKen­zie Inc., a na­tional con­sult­ing and ad­vi­sory firm.

“How­ever, there may be less whiteknight hos­pi­tal buy­ers than there were a few years ago,’’ Charleston said. Large pri­vate sys­tems Tenet and CHS have been shed­ding some of their hos­pi­tal as­sets lately rather than buy­ing more, he said. “Hos­pi­tal ac­quir­ers are likely to be more and more se­lec­tive over the next few years.”

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