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Claxton hospital on life support
Evans Memorial receives takeover proposals as county considers tax aid
Evans Memorial Hospital
Hospital and community leaders are looking for ways to rescue Evans Memorial Hospital, which has been incurring losses averaging more than $200,000 a month and recently reduced staffing to cover just eight of the 49 in-patient beds for which it is licensed. - photo by AL HACKLE/Staff

CLAXTON — Hospital and community leaders are looking for ways to rescue Evans Memorial Hospital, which has been incurring losses averaging more than $200,000 a month and recently reduced staffing to cover just eight of the 49 in-patient beds for which it is licensed.

After requesting proposals for another health-care organization to buy, lease or take over management of the hospital, its leadership has three offers pending.

Meanwhile, the Evans County Board of Commissioners invited the Hospital Authority and corporate board to a special meeting Monday night.

The hospital’s leaders had asked the county for help, but misunderstandings were apparent. For example, the county administrator and commissioners noted that covering the hospital’s annual losses would require increasing property taxes above the maximum that could be levied on the hospital’s behalf, or alternatively, imposing a $585 annual fee on every home and business.

But hospital officials had not asked the county to cover the total losses.

“We’re not looking for something like that,” Evans County Hospital Authority Chairman Carroll Anderson told the commissioners. “But, you know, we’re trying to weigh this thing with, what would it cost if the hospital closes and is gone? What’s it going to cost our community?”

The hospital employs about 140 people and spent more than $14 million in the last fiscal year. This followed cutbacks from about 190 employees the previous year, according to the hospital’s CEO. Claxton, in a county with fewer than 12,000 people, is home to four pharmacies, a nursing home, several assisted living homes and some doctors’ offices.


Bond repayment

What hospital board members did suggest is that the county cover the hospital’s losses on indigent care, which were estimated at about $250,000 per year, or make the payments on $6.1 million worth of bonds the hospital owes for previous building improvements and equipment. The bonds would be paid off in 2032 with current payments of $516,000 annually.

Taking over the bond payments, according to County Administrator Casey Burkhalter, would require at 2.5- to 3-mill tax increase. The figure would be 2.18 mills if tax collections were perfect, but they never are, he said.

Generally, a 2.5-mill increase would cost taxpayers $100 for each $100,000 worth of property. In Georgia, most property is assessed for taxes at 40 percent of market value, with a mill being one-thousandth of the value.

Alternatively, an annual $100.76 user fee on each of the county’s 5,121 home and business addresses would cover the cost.

But the user fee, Burkhalter said, could be used only if the hospital remains in business.

“The hospital must remain publicly operational for an impact fee to go in play,” he said. “You can’t just propose a fee to pay back a debt service.”

Any fee would also add to Evans County’s annual fees already totaling $243 per residence for fire, ambulance and sanitation services.

If the hospital approaches default, the county may have to take over the bond payments. The Board of Commissioners in 2006 agreed to underwrite the bond issue.

When hospital CEO Martha Tatum reported hearing rumors that the county commissioners have said the hospital is closing Dec. 31, Board of Commissioners Chairman Neal Hammack said this is not the county’s position at all.

“We have not said that,” Hammack said. “I don’t know where it’s coming from.”

He had said he wanted to keep the hospital open but compared the county funding proposals, in the face of continuing losses, to pumping air into a basketball that has a hole in it.

“The hospital is in my prayers every night, because I have lots of friends and people that work there, lots of family that work there,” Hammack said. “And the thing about it is, if I’m hurt at the road department, I’m not going to ask which hospital do I need to go to, I’m going right up here.”

Dec. 31 is the date that Tatum’s resignation, which she submitted in August citing personal reasons, takes effect, and is also when Hammack’s term as a commissioner ends because he didn’t seek re-election.


Proposals pending

Monday was the original due date for the offers to buy, lease or manage the hospital. But the hospital’s two boards — the authority and the directors of nonprofit EMH Inc. — extended the deadline by two weeks.

The boards will meet Nov. 10 to hear the proposals and make a decision, Tatum said.  Hammack said the county wants to be informed as soon as possible.

Although licensed for 49 beds, the hospital maintained just 27 for years, but has been down to eight-bed staffing since Aug. 24. That number can be increased again if demand grows, but it would take time, Tatum said in an interview.

EMH Inc. also previously owned Glenvue Nursing Home in Glennville, but sold it in 2012. In April 2013, Evans Memorial entered a “strategic partnership” with Memorial Health in Savannah, but this is limited to shared purchasing, contracts and physician recruitment.

In its 2014 fiscal year, which closed Sept. 30, Evans Memorial spent $2,961,694 more than it took in, according to a preliminary statement prior to audit. This loss was equal to about 20 percent of the total expenditures for the year.

The hospital had cut expenses by $882,000, to roughly $14.8 million, from more than $15.6 million the year before. Tatum and members of the hospital’s boards cite this as progress on efforts to reverse the hospital’s financial course.

“The hospital is not just riding this horse off a cliff. We’re making significant progress. …” said EMH Inc. board member Marty Gilbreth. “It’s not a matter of bad management at all. It’s a matter of the environment that we’re in. It’s just so caustic. Reimbursements are down significantly. A doctor can’t admit like they used to. There are just very strict criteria.”

The federal Affordable Care Act, also known as “Obamacare,” and the state’s response to it are widely cited for Georgia’s small hospitals closing or having to join forces with larger ones. Federal dollars for indigent care were eliminated with the act’s passage, and Georgia has declined to take part in an expansion of Medicaid.

The state’s shift to a different company for its employees’ health insurance also adversely affected Evans Memorial this year, Tatum said. Another factor, discussed at the meeting, is Evans County residents going to larger hospitals for care.

Tatum said she is very encouraged that the hospital has three offers and that if the county agreed to assume the bond payments, it might help seal a deal.

“It could be something that any respondee would ask, that the county would repay that bond, and then that would be a way to entice somebody,” she said.

Al Hackle may be reached at (912) 489-9454.


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