Charlton Memorial Hospital in southeast Georgia, which will suspend operations Friday, is set to become the third rural hospital in the state to close this year.
The Hospital Authority of Charlton County cited ‘‘financial instability’’ in announcing its decision to close the nonprofit facility’s doors. A family practice clinic will continue providing services, the authority said.
The decision on the Folkston facility followed closings of Richland and Arlington hospitals earlier this year.
“The hospital has been experiencing financial problems for a number of years,’’ Charlton Memorial CEO H.D. Cannington told GHN on Monday. The facility, he added, “has a tremendous amount of indigent care.’’
Local residents recently petitioned the Charlton County Commission to assist the struggling hospital. According to a WTLV report, county officials pointed out in response that the hospital was continuing to lose money, and they cited the increase in its debt — from $1 million in 2000 to more than $5.8 million this year.
With the closing, residents may have to travel 30 miles to go to another hospital, said Jimmy Lewis, CEO of HomeTown Health, an organization of rural hospitals in the state. “It will hurt the elderly and those in poverty who don’t have the means to travel 30 miles for health care.’’
Lewis predicted that more rural hospitals could close in Georgia. He cited continual cash shortages and claims disputes with insurers; projected lower payments to hospitals from the new state employee benefit contract; and the reduction of indigent care funding due to the Affordable Care Act.
The designers of the sweeping federal health law were counting on states expanding their Medicaid programs to offset the drop in federal ‘‘disproportionate share’’ program funds that Lewis was referring to. But the U.S. Supreme Court ruled last year that states are not obliged to expand Medicaid. Georgia, like many other states, has said it will not do so.
The economic impact of a hospital closing on a rural community can be significant. Matt Caseman of the Georgia Rural Health Association noted Monday that rural hospitals are a leading employer in a community, representing 20 percent of a local economy. “How are you going to attract future business when you don’t have a hospital?’’ Caseman said. “I don’t know what the future is — I’m very worried about it.’’
A federal report recently delivered more bad news for rural hospitals. The federal program to help rural hospitals has grown bloated and unwieldy, according to a report from the Department of Health and Human Services.
The critical access hospital program was designed to financially stabilize small, rural institutions by providing them with higher Medicare reimbursement rates. Hospitals in the program are supposed to have 25 or fewer beds and be at least 35 miles away from another facility.
The report did not recommend repealing the critical access status of all of those 849 hospitals. Instead, it advised that Medicare take a second look at all of the hospitals in the program.
The report is likely to send shock waves through the rural health community, Kaiser Health News reported.
Charlton, with 22 beds, is a critical access hospital.
Earlier this year came the closings of two small southwest Georgia hospitals closed: Stewart-Webster Hospital in Richland, and Calhoun Memorial in Arlington, 50 miles south of Richland.
“It is unfortunate that the current state of health care and reimbursement structure is exactly what harms community hospitals across this state,’’ said state Rep. Jason Spencer (R-Woodbine). “Some experts believe there will be an additional 20 small community hospitals in Georgia to close in the next two years.’’