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How to save a community hospital?

Future of Elbert Memorial Hospital in north Georgia unclear

ATLANTA — Elbert Memorial Hospital needs funding from the county in order to remain open.

Elbert Memorial Hospital has served its northeast Georgia county for more than 60 years.

But the future of the hospital is now unclear. Its fate will hinge on the coming days and weeks.

Elbert County commissioners are holding public hearings on a proposed one-mill property tax increase for one year to raise about $500,000 to offset the Elberton hospital’s costs for indigent care.

Without the money, the 52-bed hospital will close, officials warn. That would eliminate more than 200 jobs, and residents would have to travel more than 30 miles to the nearest hospital. A closure would jolt the mostly rural county’s economy.

Elbert Memorial lost $1.5 million in its last fiscal year, CEO Jim Yarborough. “Our concern is that charity care and bad debt are trending upward,” he said. Yarborough calls the financial crunch facing many Georgia hospitals “a silent epidemic.”

The hospital’s predicament demonstrates how counties and hospitals depend on each other financially, and how revenue pressure on each is creating an unprecedented squeeze.

“Counties are in major turmoil deciding whether they want a hospital or pick up the garbage,’’ said Jimmy Lewis, CEO of HomeTown Health, an organization of rural hospitals in the state. Meanwhile, he added, “The general cash position in most rural hospitals is extremely dire.’’

Hospitals are facing lower reimbursements from government programs and private health insurers, along with high levels of uninsured and underinsured patients.

But another key issue is Georgia’s decision not to expand Medicaid, hospital execs say.

Gov. Nathan Deal and Georgia’s legislative leaders, citing costs, have decided not to expand Medicaid as outlined under the Affordable Care Act.

Expansion “would help significantly,’’ Yarborough said. “It would create a paying source” from uninsured low-income patients, he added.

The Elbert County predicament comes in the wake of five hospitals closing in Georgia in the past two years. Four were in rural areas. And several other hospitals around the state are struggling just to stay open.

“If this disturbing trend continues, we’ll have major access-to-care issues for hundreds of thousands of Georgians throughout the state,” Kevin Bloye of the Georgia Hospital Association told GHN recently. “It will also have devastating financial consequences to areas that lose their local hospital which serves as a major economic engine.”

Meanwhile, hospitals’ requests to counties for help are more urgent now, said Debra Nesbit of ACCG, which represents county governments in Georgia. “The counties are really struggling with that.”

“Hospitals are saying, ‘Give us money or we are going to shut the door,’ ’’ Nesbit added. But with property appraisals decreasing, she said, counties have financial problems of their own. “They may not have the resources, particularly in rural areas.”

Most counties are supporting their hospitals financially, Lewis said.

Reimbursement reductions for hospitals “translate into an unfunded mandate onto the county,” Lewis added. “Rural unemployment rates are so high there’s no millage capacity to support the unfunded mandate.”

Some counties are pursuing new avenues to keep their hospitals upright. Recently, Habersham County in the northeast Georgia mountains agreed in a deal with the

local hospital authority to make monthly bond payments on Habersham Medical Center’s $37 million debt. The county will eventually take over the assets of the facility.

In Newton County, east of Atlanta, 97-bed Newton Medical Center recently requested a property tax increase to offset indigent care costs. It would have resulted in about a $600,000 funding increase, said Troy Brooks, assistant administrator of fiscal services for the hospital. But he said the county has already set the budget and did not include the funding that the hospital requested.

The hospital isn’t in danger of closing, Brooks indicated. Last year the hospital posted its first positive margin since fiscal 2008, which Brooks attributed to the nearly $2 million in funds related to the Electronic Health Record initiative in the Affordable Care Act.

Elbert County takes pride in its granite industry, and Elberton calls itself “The Granite Capital of the World.”

But its overall economy is less solid.

About one in four residents has no health insurance, according to the 2014 County Health Rankings, produced by the Robert Wood Johnson Foundation and the University of Wisconsin. The report also shows the Elbert County unemployment rate is higher than the state average, and that about one in three children live in poverty.

As the Elbert County commissioners hold public hearings on the tax increase, Elbert Memorial’s website sums up the situation: “This financial relief is needed to keep our hospital from closing, which would result in a devastating economic loss to the community and leave Elbert County residents without local access to health care services.”

Yarborough said he’s “very hopeful and optimistic” about the financial help. Still, he noted that in the current hard times, “there is a portion of citizens that are not in favor of a property tax increase.”

Elbert Memorial has an affiliation and management agreement with AnMed Health in nearby South Carolina, which has helped the hospital. Nevertheless, the charity care and bad debt for Elbert Memorial Hospital grew to nearly $4 million in its last fiscal year.

The request to the county commissioners is for funding the charity care of Elbert County residents. “They don’t have a mechanism to pay,” Yarborough said. “The ER always has to take care of you.”

The county commissioners will take a final vote on the tax increase after the public hearings. Commission Chairman Tommy Lyon said if the hospital closes, the county will have to add another ambulance and crew to transport patients to hospitals in Athens or in Anderson, S.C. – a step that would cause the budget to be in deficit.

“We’re in a very dire situation,’’ Lyon said, according to an Elberton Star article.

A recent report by the Urban Institute said Georgia’s decision not to expand Medicaid will cost the state’s hospitals $12.8 billion in lost reimbursements over a 10-year period. Medicaid expansion – making more low-income people eligible for the program – would ensure some reimbursement for hospitals that treat these people.

Hospital executives aren’t saying expansion is a complete cure-all. In Georgia, said Yarborough, Medicaid pays only 85 percent of the cost of a covered patient’s medical services. “We lose 15 cents on every dollar,’’ he said.

Still, Yarborough noted that for a hospital, getting “85 cents on the dollar is much better than zero cents on the dollar.”

Brooks of Newton Medical Center said, “I am hearing that hospitals in those states that did expand Medicaid have seen noticeable improvement because of it.”

Nesbit of ACCG recognizes the political realities in Georgia. “Clearly, Medicaid expansion is off the table right now,” she said.

“We don’t have a position on Medicaid expansion,” Nesbit said, though she added, “We want all Georgians to have access to health care.”

“We are continuing to look at the situation, look at creative ways to expand some health care access.”

Andy Miller is editor and co-founder of Georgia Health News, Inc.