Rural hospitals aren’t the only Georgia medical facilities bleeding red ink. Southern Regional Medical Center in Riverdale, near the world’s busiest airport, has been...

Rural hospitals aren’t the only Georgia medical facilities bleeding red ink.

Southern Regional Medical Center in Riverdale, near the world’s busiest airport, has been losing money since 2007. And in its last fiscal year, the loss was $20.6 million.

To help the nonprofit hospital stay afloat, Clayton County commissioners this week approved a package of special tax-funded projects that would bring in $50 million to help the 331-bed facility. The SPLOST has to be approved by voters.

“The hospital is in an untenable position if we do not receive community support,’’ Claudia Hall, director of marketing for Southern Regional, told GHN.

She and others say that a Medicaid expansion in Georgia would help the hospital as well.

Southern Regional Medical Center

Southern Regional Medical Center

Four rural hospitals in Georgia have closed in the past two years, citing financial struggles.

A closure of the much larger Southern Regional, just a short drive from Hartsfield-Jackson Atlanta International Airport, would be a devastating financial blow to Clayton County. The hospital has 1,850 employees and more than 500 physicians and specialists on the medical staff.

Southern Regional notes that about one-third of Georgia counties, including those in the metro Atlanta market,  supplement local hospital budgets to offset financial losses from providing charity care. (Clayton County contributed about $3.7 million to the hospital in fiscal 2007, and in 2008 it contributed about $3.2 million.)

Hall told GHN that if the state expanded its Medicaid program, the new coverage for the uninsured — and revenue — would help the hospital. But she said the hospital has not been able to quantify that amount.

Atlanta’s Grady Memorial Hospital, albeit a much larger operation, has put the revenue impact of expansion at $25 million per year from newly insured patients.

The primary target population for Medicaid expansion are adults living under the poverty line. Clayton County’s percentage of residents living below the poverty level, 21.5 percent, is higher than the Georgia average of 17.4 percent.

And Clayton’s uninsured rate, at 27 percent, also exceeds the state’s average rate.

The Affordable Care Act, or Obamacare, calls for expanding Medicaid as a way of extending coverage to low-income people. But the U.S. Supreme Court ruled in 2012 that individual states don’t have to go along with expansion, and Georgia is one of the states that have said “no.”

Gov. Nathan Deal, in rejecting expansion, has said it would be too costly for Georgia. And the General Assembly, dominated by Deal’s fellow Republicans, is considering a bill that would require another step — legislative approval — before any expansion of the Medicaid program could occur.

Rep. Jan Jones

Rep. Jan Jones

Medicaid expansion would cost the state $2.8 billion over 10 years, said Rep. Jan Jones, House speaker pro tempore. “Doubling down on faulty, unsustainable government programs’’ is the wrong thing to do, she added.

Southern Regional currently serves a high level of Medicaid and PeachCare patients. The government programs typically do not pay enough to cover the cost of hospital services, experts say.

The hospital sees more than 80,000 emergency room patients a year, and it reports that more than 30 percent of these visits result in mostly “uncompensated care” charges. In fiscal 2013, Southern Regional’s cost associated with uncompensated care was about $21.6 million.

The hospital also has promised to cut its costs by $12 million — the same amount it was requesting from the county annually. Southern Regional recently eliminated 61 positions. Forty-three Southern Regional employees were laid off as a result of those cuts and the remaining positions were vacant.

Without the county’s help, Hall said, the hospital would have to look at cutting medical services.

If voters agree to the plan, proceeds from the SPLOST would be used to pay off the hospital’s bonds — about $45 million

Commission Chairman Jeff Turner said Clayton County could lose its main health care facility if the SPLOST doesn’t pass, according to an article in the Clayton News Daily.

“According to all of the documentation that I’ve seen and heard from the hospital, they need immediate relief now,” said Turner. “If we wait until a November vote, the hospital will probably be closed by then.”

Trying to get financial help from the county is a good move for the hospital, said Greg Charleston of consulting firm Conway MacKenzie Inc. in Atlanta. And the hospital’s cutting costs at the same time helps its case, Charleston added

“It’s hard for these independent hospitals to survive,’’ Charleston said.

A state expansion of Medicaid “would be a huge help to Southern Regional, with its high percentage of charity care,’’ he added.

Dr. Edwin Davis agrees. Davis, an ENT physician who has worked at Southern Regional for decades, told GHN in an email that Medicaid expansion in Georgia “would help both patients and hospitals.’’


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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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