Five years ago, Marietta-based Wellstar Health System bought five Georgia hospitals from Tenet Healthcare.
The prize of the lot was seen to be North Fulton Hospital in suburban Roswell, not far from Wellstar’s hub. Today, it’s doing well financially, as expected. Two other hospitals, in towns on the southern outskirts of metro Atlanta, have made a profit as well.
The two other facilities included in the deal were Atlanta Medical Center (AMC) in the downtown Atlanta area, and the AMC-affiliated facility in the nearby town of East Point, one of the original working-class suburbs of the city. These two hospitals had long suffered problems with infrastructure and finances. There were hopes that Wellstar would help turn them around.
That hasn’t happened.
Now a Wellstar advisory board is calling for the nonprofit system to inject more resources and more effort into invigorating the two financially struggling hospitals. This community board believes they can be success stories, with the right vision and partnerships.
“The evidence of an authentic plan and appropriate strategy appears non-existent for revitalizing the AMC Downtown and East Point hospitals,’’ said a letter from the chairman of the advisory board for the two hospitals, sent March 2 to the chairman of the Wellstar Health System board of trustees.
The letter, from Lisa Medellin, chairman of the volunteer board, was obtained by Georgia Health News.
The group’s goal is to ensure that “the underserved and disenfranchised patients/residents are given a voice that results in them having access to the same quality of health care services offered in many of the suburban hospitals that comprise the Wellstar umbrella,’’ the letter said.
Wellstar has 11 hospitals in all, with several in the northwest Atlanta suburbs.
A year ago, Wellstar said it was exploring a variety of strategic options for Wellstar Atlanta Medical Center, which experts said could include a joint venture or even a sale. Wellstar said at the time that it had made $126 million in investments in the AMC campuses, including updating facilities. But aging infrastructure remains an issue.
The two AMC hospitals lost about $10 million on revenues of more than $2 billion in 2020, according to American Hospital Directory figures.
Can past glories return?
Atlanta Medical Center has a distinguished history. Originally an infirmary founded in 1901 by a local Baptist pastor who was also a physician, it grew rapidly and was known for years as Georgia Baptist Hospital. Later it became Georgia Baptist Medical Center.
For decades it was one of the state’s most prominent health care facilities, but its fortunes waned after the middle of the 20th century as competition increased and the area where it is located declined economically.
That area is the equally historic Old Fourth Ward of Atlanta, which in the last few years has seen a wave of real estate development and attracted an influx of new residents. Unfortunately, the hospital’s patient mix still doesn’t reflect the economic gentrification of the community, the advisory board’s letter said.
Meanwhile, Wellstar AMC South, in East Point, sits in a high-poverty community that, without a hospital, would be a “health care desert,’’ the letter said.
“Both hospitals serve a predominately low-income African-American population that carry the burden of health disparities on almost every chronic disease indicator that is a marker for being at higher risk relative to COVID-19, lower life expectancy and higher health care costs for treatment,’’ Medellin wrote.
Since 2018, there have been three interim CEOs overseeing the two-hospital unit.
The letter from the advisory board cited “ill-conceived random strategies to reduce or eliminate services . . . the poor financial condition of the hospitals, the slow improvement on safety and quality control metrics and the challenges with employee retention.’’
Wellstar said in a statement Thursday that it’s still engaged in a process to find “a long-term, sustainable solution for the communities served by AMC.’’
“Our process to find the right solution and our communication with our AMC teams and regional health board about our progress have been impacted by the global pandemic in ways we could not have anticipated,’’ the statement said.
Wellstar officials met with members of the health advisory board last month.
“We are committed to finding the right solution for the AMC communities, and while we do that, we are continuing to invest in AMC to improve the care we provide as a safety net health care provider,’’ the Wellstar statement said.
There has been talk in the industry that the hospital system is seeking a buyer for the two AMC facilities.
Medellin, in an interview with GHN, said Thursday that there has been a lack of transparent communication between Wellstar and the community board. She said that if Wellstar is seeking a buyer for the two facilities, the ideal partner would be one that “has a positive reputation and knows how to serve urban communities.’’
She said the members of the advisory board ‘‘are passionate about the disenfranchised and those affected by health inequities. They want the best for this hospital system.’’
One of the community board members, Todd Greene, told GHN that “health equity must not merely be trendy words and phrases. Rather, it must be embedded in the corporate ethos and manifest in attention and actions.’’
The Southside of Atlanta “is experiencing significant economic development activity with a strong focus and successful track record of creating jobs and investment,’’ said Greene, former executive director of the Atlanta University Center Consortium. “To sustain these opportunities, the companies and families in these communities deserve and need a strong health care provider partner that is focused on how it can itself be positioned as an important asset in the area’s economic renaissance.’’
The hospitals can be operated profitably, said Greene, now the executive director of WorkRise, a national platform for transforming the labor market.
Many Southside residents with employer-based insurance – which reimburses hospitals better than government insurance — pass the AMC hospitals by and instead travel to competitors in Midtown and North Atlanta, because those more distant hospitals “have invested in facilities and enhanced health care services,’’ he said.
What’s needed, he said, is “strong vision, targeted investments, and focused partnerships with employers, residents and other stakeholders.’’