Another Georgia hospital will shut its doors this fall — the fifth to do so in the past two years — as declining numbers of patients, lower reimbursements and a myriad of other challenges threaten hospitals’ bottom lines.
Smyrna-based Emory-Adventist Hospital will close by Oct. 31, hospital leadership announced on Wednesday. It will be the first hospital to close in metro Atlanta since 2009, according to the Georgia Hospital Association. Four hospitals in rural Georgia have also closed in the last couple of years.
The closure is being spurred in part by falling patient volumes as large health systems buy up physician practices, said Pete Weber, board chairman of Emory-Adventist. Those doctors begin referring their patients to the health systems that bought them instead of smaller standalone hospitals, Weber said.
“We’ve really been struggling for many, many years,” he said of the 88-bed nonprofit. “If a hospital is unable over the long term to support itself, then you have to make these tough decisions.”
Emory-Adventist has made enough money to cover its expenses in only eight of the last 26 years, Weber added. Florida-based Adventist Health System bought the hospital in 1976, a couple of years after it was founded, and formed a joint venture with Emory Healthcare in 1995. The two health systems have contributed $22 million since then to help make up for budget shortfalls.
Continuing to operate the hospital in today’s health care environment isn’t realistic, said Emory Healthcare CEO John Fox. While Emory was involved in significant decisions at the board level, Adventist handled the hospital’s day-to-day operations, according to Weber. It has 500 employees.
Small hospitals across the state — many of them in rural areas — face similar hurdles.
Hundreds of thousands of Georgians remain uninsured. The Affordable Care Act is demanding that hospitals improve their quality of care or get hit with substantial penalties, and is urging the use of electronic medical record systems, which can cost tens of millions of dollars. Meanwhile, government health programs and private insurance companies are paying hospitals less.
Large health systems have the financial resources and manpower to address these challenges, said Kevin Bloye with the Georgia Hospital Association. Small, standalone hospitals do not.
“Some of them are just trying to make sure they can keep their doors open month-to-month,” Bloye said. “It definitely puts them at a disadvantage.”
Emory-Adventist likely lasted as long as it did because it had two large health systems to backstop them, Weber said. “Rural hospitals don’t have that luxury.”
A growing number of standalone hospitals in both metro and rural areas have partnered or been bought by large health systems, such as Emory and Piedmont Healthcare, to help survive in a rapidly changing health care marketplace. That trend, experts say, will likely continue.
Bill Custer, a health care expert at Georgia State University, said he expects to see some hospital closures in urban areas, but mergers between large health systems and small facilities will be more common.
Emory-Adventist had talks with multiple potential partners but couldn’t reach an agreement, Weber said. The Oct. 31 closing date gives the hospital plenty of time to help patients make the transition to other providers, Weber said. It will also host several job fairs for its employees.
“We take this as a very serious, sacred trust,” he said. “It’s a really sad day for us.”
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