DEL.ICIO.USIf Clayton hospital closes, who gets patients?
The Atlanta Journal-Constitution
Wednesday, December 17, 2008
Clayton County’s only hospital has two weeks to find $40 million or possibly risk burning through its small amount of cash and closing.
Southern Regional Health System officials will meet with SunTrust Thursday to ask for an extension on a $40 million debt due Dec. 31.
The 331-bed Riverdale hospital has spent the past several months scrutinizing spending, streamlining services and seeking help from the Clayton County Commission, hospital chairman Ron Dodson said.
The final straw came Tuesday night when the commission turned down a proposal for the county to back a $40 million bond for the hospital. The proposal would require no cash from the county, only the use of the county’s bond rating. Commissioners, citing the county’s unstable finances, said they need more information.
While Southern Regional has no immediate plans to close, area hospitals in Henry, Fayette and Fulton counties are concerned they may inherit thousands of new patients, most of whom have no health insurance.
“It’s something we’re keeping our eyes on,” said Kendra Gerlach, a spokeswoman for the 460-bed Atlanta Medical Center. “Closing any hospital in the metro area would add additional challenges to the other hospitals.”
Officials at Piedmont Fayette Hospital, which has 143 beds in Fayetteville, and Atlanta Medical Center said they also have financial issues and definitely cannot take on any more patients.
Clayton County commissioners have pledged to keep their hospital but were unsuccessful this week in working out a bailout plan for Southern Regional, which is Clayton’s fourth-largest employer.
“We got no new answers,” from the hospital on Wednesday, said County Commission Chairman Eldrin Bell. “I need assurances my taxpayers won’t end up paying the hospital’s bills in three or five years.”
If Southern Regional misses a payment, taxpayers could end up with a $40 million-plus bill.
Hospital officials continued Wednesday to lobby commissioners and put together a new plan that would promise $6 million — enough to cover two years of payments — set aside in a special escrow account.
“There was so much confusion last night with the commissioners getting their budget and our budget mixed and their expenses and our expenses mixed,” Dodson said. “They just need more information. The hospital is going to be there one way or another. We just have to get the support of our county.”
Without the county help, the hospital will have to pay off the debt from its $48 million reserve. That wouldn’t leave enough to cover its $20 million monthly operating costs if it were still operating at a loss, Dodson said.
“If we have to put all of our cash out to satisfy our bond issue, then we’re broke,” Dodson said. “We have some revenues, but not enough.”
Last fiscal year, 74,212 patients came to Southern Regional’s emergency room. Most were from Clayton, but some were from south Fulton, Henry, Fayette and DeKalb counties.
Once known as a community hospital where babies are born and broken bones are repaired, Southern Regional has acquired top physicians and medical equipment to conduct the most complex surgeries. While those changes have brought in new revenues, they also have been a large expense.
However, the most troubling expense is $83 million a year in uninsured patients that the hospital covers.
The hospital ended the 2008 fiscal year with a $7.07 million loss, $3.76 million of it on hospital operations and the rest from investments, hospital officials said.
The hospital also discussed possibly partnering with another health system. But with the state of the economy, that’s unlikely, Dodson said.
Layoffs are also unlikely, since the hospital is already at bare-bones staff with 2,224, Dodson said.
Hospital consultants said Wednesday that any cost-cutting by Southern Regional would likely focus on non-medical areas.
“You would not want to cut jobs or services that affect direct patient care,” said Christopher Press, a consultant with Atlanta-based Morgan Healthcare Consulting.
Another Atlanta-based hospital consultant, Jim Price, said Southern Regional could also try short-term tactics such as accelerating hospital collections of medical bills, freezing pay and not filling open jobs.
The hospital’s operating loss of $3.76 million is not that high, Price added. “It’s not an inner-city hospital hemorrhaging cash,” he said. “They’re not losing that much.”
Despite its financial problems, Southern Regional could be an acquisition target.
“There’s value because they have patients,” said Tom Thornhill of CBIZ Valuation Group, an Atlanta company. “There are enough [hospital companies] out there looking at buying hospitals under pressure.”
If the hospital closes, the patients likely would be absorbed by nearby hospitals, some experts said. “This is not a Grady shutting down,” Price said.
But while area hospitals may compete for revenue with Southern Regional, officials of those hospitals said they are in no position to absorb any of the Clayton hospital’s patients.
The 215-bed Henry Medical Center in Stockbridge was at full capacity Wednesday, with overflow in the emergency room, spokeswoman Donna Braddy said.
“I doubt we could absorb or accommodate their patients if they were to close. It’s unrealistic,” Braddy said. “The impact for everyone in the area would be devastating for them to close.”
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Comments
By rhonda
Dec 27, 2008 7:26 PM | Link to this
I recall that there is a policy whereby an hospital can not deny emergency services to a indigent patient. Southern Regional Medical Center (SRMC)and Clayton County are the receipients of Atlanta's residents who had to be relocated due to gentrification.
I am sure that some of our own residents have failed to pay their outstanding balance(s) for services rendered at SRMC).
My husband had surgery at SRMC and whatever our insurance did not cover we paid the balance.
Residents of Henry and Fayette just because you passed laws to keep our kids out of your schools don't think that you are exempt from being receipients of new residents to your respective counties. Your county has vacant homes that were involved in the ARM/home equity lending practices along with the same economic woes that the recent of us are enduring.
I am hoping that with a new school board and newly elected officials that things will get better in 2009. We are not happy about some of the decisions that our elected officials have made either.
My heart goes out to the medical team at SRMC.
Clayton County residents please don't sit back and allow our county hospital to close its doors.
The Northern end of the county has already lost businesses due to the FIFTH runway.
By Clayton Native, now Gone
Dec 22, 2008 6:54 PM | Link to this
I was one of the original nurses at Southern Regional when it opened in 1971, and I worked there for 15 years. The region was so proud to have our own hospital! No more rushing all the way downtown in labor or for emergencies! And now it looks like it might go back to the way it used to be.....
Like the rest of Clayton County, down the tubes. CherylS, what you have proposed is against the law. Federal EMTALA statutes prohibit hospitals from turning away anyone who presents in active labor or with an emergency, whether or not they can pay. If they can't pay, why would Grady want them? They already do more indigent care than any one, and besides that, Grady is only officially the indigent care facility for Fulton and Dekalb residents. Not Clayton. Clayton doesn't give Grady any money to do it. Fulton and Dekalb are the only counties who support Grady. Sometimes people make all these suggestions without knowing the whole situation. But anyway, I am very sad to see my home county going to h. All the sorry leadership and residents who have no pride or decency should be ashamed for ruining what used to be a decent place to live.
By roekest
Dec 22, 2008 1:28 PM | Link to this
Clayton County has been nothing less than an infection that spreads to its adjacent counties.
First, their schools lose accreditation, with the effect of school systems in Fayette, Henry, and Fulton counties absorbing many of those students.
Now, it's going to be a hospital full of people who can't pay their bill.
Clayton needs to be bulldozed and its leadership (and its thugly residents) dispersed to the 4 corners of the earth, so the county can be rebuilt by far more intelligent people than those that run the place now.
I think all of us who live in surrounding counties are tired of hearing of Clayton's mismanagement, both in the private and public sectors.
By Dat Right
Dec 18, 2008 5:29 PM | Link to this
Another institution that can not co-exist with the ghetto community. Deez fools bring down everything. Dey fool!!!
By Nick
Dec 18, 2008 1:05 PM | Link to this
I'm glad this article was run today . . . it shows how Southern Regional's troubles could potentially spread to other hospitals. What many people do not understand is that a lot of Southern Regional's problems stem from their decision to provide indigent care. They do not get paid from this, which eats away at their profits. If the hospital closes, other area hospitals would absorb this patient load and could be in the same financial situation in the future.
The Atlanta area needs Southern Regional. No matter what your opinions are about our healthcare system in general, just know that Clayton county residents will be the ones to suffer if it loses its school accreditation and its only hospital in the same year. Property values will plummet and there will be a mass exodus out of there!
By gwatl
Dec 18, 2008 12:12 PM | Link to this
The rules on health care are becoming insane! Seems as though a growing number of folks believe that health care is a 'right' already. Think that if the incident requiring a visit to an ER could have been prevented by the 'visitor', and the 'visitor' has no insurance (i.e., drugs, alcohol, non life threatening gunshot/knife wound, results of a fight, STDs, unmarried pregnancy, etc), then the hospital retains the right and responsibility to its stockholders to refuse service. At some point in time, folks have got to start taking responsibility for themselves!
Take a look at how few folks are going into Med school today!! With these insane political solutions, we are destroying the best medical system in the world. In all candor, folks need to establish their own priorities!! Health insurance or booze/drugs/unaffordable cars!
By crazyprof
Dec 18, 2008 8:41 AM | Link to this
If the Clayton County board of commissioners and its chair Eldrin Bell trusted the Obama team to change the health care system as they promised then they would not be afraid of cosigning the Hospital's note because there would be no risk.
What is Bell thinking?
Maybe Bell is really a Republican?!?
By Reality Bites
Dec 18, 2008 8:24 AM | Link to this
This hospital is guilty of gross mismanagement. Maybe it will not be a bad thing for them to serve as an example by closing, I just feel for the many dedicated and hard working nurses and other employees that will suffer as a result , not to mention the patients. They brought this on themselves.
By CherylS
Dec 18, 2008 7:28 AM | Link to this
I think Southern Regional, Piedmont Fayette and South Fulton should institue a policy that if you have no insurance and can't private pay, you have to go to Grady.
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