The owner of North Georgia Medical Center in Ellijay plans to close the hospital’s inpatient services and lease its emergency room and medical offices to Piedmont Healthcare.
Piedmont Mountainside Hospital in Jasper, about 20 miles away, would take over operation of the Ellijay hospital’s ER, doctors’ offices and imaging and outpatient surgery centers, under a lease agreement that requires state regulatory approval.
North Georgia Medical Center is owned by SunLink Health Systems, based in Atlanta. The company will retain ownership of the nursing home on the Ellijay hospital campus.
SunLink also operates Chestatee Regional Hospital in Dahlonega, along with Trace Regional Hospital and a nursing home in Houston, Miss., and a specialty pharmacy company in Louisiana.
Piedmont Healthcare, a nonprofit system based in Atlanta, is working to expand geographically. The move into Ellijay, if approved, would advance that strategy. Piedmont also is in partnership talks with Athens Regional Health System.
The planned downsizing of North Georgia Medical Center reflects the financial crunch squeezing rural hospitals, said Jimmy Lewis, CEO of HomeTown Health, an association of rural hospitals in the state.
Four rural hospitals have gone out of business in Georgia since the beginning of 2013. In December, a fifth hospital, Hutcheson Medical Center in Fort Oglethorpe, closed its doors and then partially reopened — with an emergency department, radiology department and lab.
The plan in Ellijay could resemble the standalone ER idea pushed by Gov. Nathan Deal as a way to help financially struggling rural hospitals.
One major drawback for freestanding EDs, as they were proposed in Georgia in 2014, is that they would not be able to bill Medicare or Medicaid at hospital rates. They would have to bill those programs at a lower “provider’’ rate, or as hospital outpatient clinics.
SunLink’s CEO, Robert Thornton, told GHN on Tuesday that North Georgia Medical Center has been losing money, and that many people needing inpatient care are already going to Piedmont Mountainside. The Ellijay hospital averaged about six inpatients for the past year, he said.
The closure of the hospital beds in Ellijay “is probably not what the community wants to hear,’’ Thornton said. He added, though, that the shutdown won’t have a major effect on jobs. It will result in the loss of about 20 positions, Thornton said.
He added that he considers the upcoming North Georgia Medical Center plan not a hospital closure, but “a rationalization of health care services in the community.” The transition won’t take place immediately, but would take some months to complete, Thornton said.
Piedmont Healthcare executive Matt Gove told GHN on Tuesday that his organization’s intent through the lease of medical services “is about ensuring that the community continues to have access to high-quality health care.”
Gove said Piedmont is already active in Gilmer County, where Ellijay is located, with physicians and patients in the county.
A spokesman for Georgia House Speaker David Ralston (R-Blue Ridge), who was born in Ellijay and whose district includes Gilmer County and North Georgia Medical Center, said that “unfortunately, many hospitals and doctors across Georgia, particularly those in rural areas, are struggling to cope with … changing financial realities.”
The Ralston spokesman, Kaleb McMichen, said that under the Obama administration, “actions at the federal level have driven up the costs of health care, including deductibles and premiums of commercial health insurance policies as well as the state’s portion of Medicaid spending.”
“As recently as last week, Speaker Ralston has said time and again that maintaining access to high-quality health care for Georgia’s citizens is a priority,’’ McMichen said. “He remains engaged with stakeholders and is working with them to find the best of available solutions to preserve access to hospital care in Gilmer County.”