Business Roundup: CHC to Advise GA Critical Access Hospital

A Community Hospital Corporation deal illustrates the great financial strain on Georgia 's small and rural hospitals as a result of a decade-long decline in state Medicaid reimbursements, the economic recession, and the challenging demographic of older, poorer, and sicker patients.

Monroe County Hospital, a 25-bed critical-access hospital serving the Forsyth, GA area, has hired Community Hospital Corporation to provide advisory and management support services.

Kay Floyd, CEO of Monroe County Hospital, said the county 's hospital authority elected to hire CHC after considering everything else on the spectrum from loose affiliations to an outright sale of assets.

 "We have a very proactive hospital board that has had their mind on strategic planning and mapping the future of the hospital for the last couple of years. It took us into a pretty extensive [request for proposal] process looking at affiliation, " Floyd said in a telephone interview.

 "We were prompted by the concerns around shrinking reimbursements, some concerns that are directly related to the healthcare reform law and the shortage of physicians. We are in a community of 26,000 in the county and trying to get primary care physicians in rural communities is a significant challenge. "

In the end, Floyd says, it came down to maintaining local control.

 "My hospital authority feels strongly about keeping control of the healthcare delivery local, strongly about governance, and strongly about having the delivery site be accessible in the community itself and preserving the hospital, " she says.

"Healthcare delivery should be local. We want to preserve our services. We are pretty heavy on the geriatric demographic with people who have limitations and an inability to travel very far to get their services. Transportation is a big hurdle for some of the people in our community. We serve a lot of people in our hospital who walk to our emergency room. "

The deal comes as Georgia 's small and rural hospitals are under tremendous financial strain owing factors including to a decade-long decline in state Medicaid reimbursements, the Great Recession and its continuing after-effects, and the challenging demographic of older, poorer, and sicker patients.

Established in 1957, Monroe County Hospital is located about 60 miles south of Atlanta Under its critical-access designation, Monroe County Hospital has a transfer designation agreement with the Medical Center of Central Georgia, about 24 miles to the southeast in Macon. HCA also has two hospitals in Macon.

Craig Sims, CHC 's senior vice president of operations, says many of the smaller rural hospitals that CHC contracts with want to remain independent.

 "They are looking for affiliation strategies or a way where they can continue to serve that community, " he says.  "What has worked best in our model is the relationship that brings in a larger or tertiary partner in that market for clinical affiliations. So, it really varies by the opportunity and what the board and the hospital and the local market have that cause us to make those decisions. "

Floyd says she will be able to tell relatively soon if the contract with CHC is a success.

 "I don 't mean to be coy, but the bottom line is the answer, " she says.  "We 're going to be looking for some financial improvements right away. I will also be looking for some clinical improvements where the service line that we have available would be concerned. "

The MCH deal was one of two new contracts that CHC announced this month. The Plano, TX-based not-for-profit company also signed a contract to manage 49-bed Bowie (TX) Memorial Hospital, located about 90 miles northwest of Dallas.

CHC owns or leases 10 hospitals. Bowie Memorial and Monroe County are among the 12 hospitals that CHC 's consulting arm, CHC Consulting, manages or supports.

 "Our primary objective is to ensure that community-based hospitals achieve long-term success, especially as federal and state governmental mandates drive down reimbursements for both hospitals and physicians, " CHC President and CEO Michael D. Williams said in a media release.

Bowie Memorial Board Chairman Tim Winn said the relationship with CHC  "will help to strengthen our hospital for future success and prepare for the myriad of changes occurring within the healthcare environment. "

VCU Health to Acquire Community Memorial Healthcenter
Virginia Commonwealth University Health System in Richmond will acquire Community Memorial Healthcenter in South Hill, VA, in a deal that is expected to be completed this summer, the two health systems have announced jointly.

The hospital, located about 70 miles south-southwest of Richmond and near the North Carolina state line, will be renamed VCU Community Memorial Hospital. VCU Health System will commit at least $75 million in new investments in CMH, including a new hospital, healthcare technologies, clinical initiatives and physician recruitment.

CMH is licensed for 99 acute care and 161 long-term care beds and provides inpatient and outpatient services. It is one of the area 's largest employers with approximately 800 employees, 200 volunteers and 85 physicians who represent more than 30 medical specialties. VCU has an existing relationship with CMH through the Massey Cancer Center.

CMH employees join about 9,000 VCU Health System employees. The CMH board of directors will continue with local and VCU Health System appointments. Under the new structure, local leaders and CMH will continue to represent local interests on governance and strategic planning, and the CMH Foundation will continue to be a philanthropic arm of CMH.

CMH Chairman John Lee said in prepared remarks that the acquisition was the culmination of an extensive affiliation study conducted by a committee of stakeholders.

 "Our committee 's charge was driven by a desire to ensure CMH 's long term sustainability, and allow it to not only continue its legacy of high quality healthcare offerings, but to expand and enhance its services, and do so from a new state of the art hospital worthy of those CMH is here to serve, " Lee said.

 "We recognized that meeting those objectives would likely require the ongoing support and clout of a world class organization, and this mutually beneficial relationship with the VCU Health System very successfully accomplishes all those goals. "