The Best and Worst of Times for Georgia Hospitals

With apologies to Dickens, these are the best of times, and these are the worst of times for healthcare in Georgia. It just depends on where you live.

Advocating Change: Monty Veazey, president and CEO of the Georgia Alliance of Community Hospitals; photo Matt Odom.

In populous areas, healthcare is booming as mergers and unprecedented hospital expansions help ensure residents get convenient and cutting-edge care.

In rural areas, however, many residents struggle to receive basic care. Some Georgia counties don’t have a single physician, and many hospitals that once served rural communities are closing.

Health System Expansions

Some of the largest expansions in the state’s history are taking place, not surprisingly, within an hour or so radius from Atlanta.

Construction of the new Children’s Healthcare of Atlanta Arthur M. Blank Hospital – the largest healthcare construction project in state history, says Children’s CEO Donna Hyland – is underway at its North Druid Hills campus. When completed, the 19-story, 2 million-square-foot hospital will offer many clinical services including a neonatal intensive care unit, pediatric intensive care unit, comprehensive inpatient rehabilitation, cardiac and transplant units, orthopedics, neurology, surgery, hematology/oncology and more. With 446 licensed beds, it will be one of the largest dedicated pediatric hospitals nationally by bed count.

Not far north, the Northeast Georgia Health System is adding to its facilities at several different locations, including Braselton, Gainesville and Lumpkin County. “Our community continues to grow, so we’re growing with it,” says NGHS President and CEO Carol Burrell.

In Braselton, a $565 million, four-year hospital expansion project will add 235,000 square feet of new clinical space and two patient-care floors with space for 150 beds and will double the number of treatment rooms in the emergency department, says Burrell. The first phase will be completed in the summer of 2025 and the second phase in 2026.

Meeting Demand: Carol Burrell, Northeast Georgia Health System president and CEO; photo Daemon Baizan.

In Gainesville, a new $700 million, 927,000-square-foot, multistory tower is slated to open in early 2025. The tower, located next to the existing North Patient Tower at the system’s flagship hospital, will bring together heart and vascular services provided by the Georgia Heart Institute and will add operating rooms, expanded stroke services and a helipad on the roof, Burrell says.

In Richmond County, Augusta University Health System is now Wellstar MCG Health after partnering with Marietta-based Wellstar Health System. Wellstar’s 40-year contract with the University System of Georgia Board of Regents allows Wellstar to run the hospital attached to Augusta University’s Medical College of Georgia.

Wellstar plans to build and operate a new hospital in nearby Columbia County and will bring much-needed money to the university hospital system, which is more than $200 million in debt. Wellstar closed a hospital, the Atlanta Medical Center, in downtown Atlanta last year.

In Lumpkin County, construction is underway on a new 66,000-square-foot hospital on a 54-acre site along GA 400. The facility will house 16 inpatient rooms, 10 emergency treatment rooms and three operating rooms as well as imaging facilities, a lab, pharmacy services and dining area. The hospital is expected to open in 2024.

Other expansions in the state include:

• an $800 million, 17-story patient tower expansion to Northside Hospital’s Gwinnett campus in Lawrenceville: The expansion, expected to be completed in 2025, will add 146 patient beds, making Northside Gwinnett the largest facility in the Northside system.
• a $35 million project to add a new medical office building next to Memorial Health Dwaine and Cynthia Willett Children’s Hospital of Savannah: The expansion, which will relocate the hospital’s outpatient services, is expected to be completed in mid-2024.
• a 185-bed expansion of Grady Health System’s main campus in Atlanta: Funded with $130 million of federal COVID relief money from the state, the expansion will make Grady the nation’s largest Level 1 trauma center in terms of number of trauma patients admitted. The cash infusion came after the closing of Atlanta Medical Center was announced, leaving Grady as Atlanta’s only Level 1 trauma center.
• a $65 million, 80,000-square-foot expansion of Piedmont Newnan Hospital: the expansion, which will add 50 patient beds, is expected to be complete in spring 2024.

Hospital Closures and Lack of Care

Even as health systems in metro areas experience record growth, many hospitals in rural counties are struggling to stay open. Since 2005, nine have closed, making Georgia the No. 6 state in the nation in terms of hospital closings.

Improving Outcomes: Children’s Healthcare of Atlanta CEO Donna Hyland; photo contributed.

Recent casualties were Southwest Georgia Regional Medical Center in Cuthbert, the county seat of Randolph County with a population of around 3,500, and Northridge Medical Center, a 90-bed hospital in Commerce.

While their closures – both in October 2020 – are the most recent in the string of rural hospital closings, they are not likely to be the last, says Monty Veazey, president and CEO of the Georgia Alliance of Community Hospitals. “I was reading an article in Becker’s [Hospital Review]. They estimate 12 hospitals in Georgia [are] on the brink of closure, so there is more to come. They did not name them, but I can guess which ones they are,” he says.

Veazey says it’s not just the number of patients a hospital treats, but who pays – or doesn’t pay – for their care that determines its fate.

“In the hospital industry we look at what is the called the payer mix, and the payer mix represents Medicaid, Medicare, self-pay and the commercially insured,” he says. “So those four things make up the component of reimbursement to the hospital.”

Payment by commercial insurers for services tends to be highest among the payment mix, so Veazey says that hospitals in higher population areas, where people have jobs that provide insurance, tend to fare best.

Medicare and Medicaid, on the other hand, pay roughly 80% of what it costs the hospital to provide the service. For self-pay patients – those without either public or private insurance – hospitals collect on the average five cents on the dollar, Veazey says.

“So in the rural areas, where you have a higher percentage of Medicaid and self-pay patients and very little commercially insured, it is hard for hospitals to keep the doors open,” he says.

Hope for Rural Hospitals

While rural hospitals will likely always face financial challenges, several efforts have the potential to keep them operational. The most important, Veazey says, is Medicaid expansion.

Georgia is one of only 10 states that hasn’t fully expanded Medicaid – that is, opening Medicaid eligibility to residents based solely on an income of less than 133% of the federal poverty level (FPL) – through the Affordable Care Act (ACA)

Under the provisions of the ACA the cost of the newly covered population under Medicaid expansion was fully covered by the federal government until 2016. At that point federal funding was reduced to 90% with the individual states covering the remaining 10% going forward.

A 2018 study published in Health Services Research found that Medicaid expansion reduced uncompensated care for hospitals located in low-income areas. The authors of the study wrote, “An injection of additional Medicaid revenue could help these hospitals offset the cost of providing care to low-income patients in rural communities.”

Educating Physicians: Dr. Jean Sumner, dean of the Mercer University School of Medicine; photo Matt Odom.

While Georgia has not fully expanded Medicaid, on July 1 it began implementation of the state’s Section 1115 Pathways to Coverage waiver. The waiver does not qualify for enhanced federal funds but gives Georgia the authority to extend Medicaid coverage to 100% of the FPL for parents and childless adults, who comply with certain work and premium requirements. Georgia’s is the only Medicaid program that has a work requirement and early reports show uptake of the program has been extremely low – which some experts attribute to the burden of submitting and verifying work hours.

“Medicaid waivers help but don’t cure the entire problem,” says Veazey.

“Medicaid expansion in Georgia would pick up about 800,000 lives that are not covered today,” he says.

Although Medicaid reimbursement is low, it does provide a hospital with cash flow, which is crucial to the operation of any business, he says.

Also being debated ahead of the 2024 legislative session is whether to reform or repeal Georgia’s Certificate of Need (CON) law.

The law requires anyone wanting to build a new hospital or provide new medical services to prove to the state Department of Community Health that the facility or services are needed in that community.

Supporters of CON say a repeal could negatively affect rural hospitals because they would have to compete with newer hospitals, while opponents say the CON requirement has contributed to rising healthcare costs and reduced access to healthcare.

Other help for cash-strapped hospitals may come in the form of grants and programs such as the Georgia Rural Hospital Stabilization Grant Program (RHSGP) and the Georgia HEART Hospital Program.

Sponsored by the Georgia Department of Community Health and State Office of Rural Health, RHSGP awards grants to stabilize and strengthen the financial base of rural hospitals in Georgia. The goal of the program, which is now in its eighth year, is “to reduce the number of closures that may be a result of financial stress created by loss of market share, under-utilization or inappropriate utilization of services, or other variables that can be identified and addressed through a focused, intentional assessment and intervention,” according to the program’s website.

In 2023 eight rural hospital systems – Emanuel Medical Center in Swainsboro; Jefferson Hospital in Louisville; Effingham Health System in Springfield; Southeast Georgia Health System in both Brunswick and Camden; Clinch Memorial Hospital in Homerville; Washington County Regional Medical Center in Sandersville; Liberty Regional Hospital in Hinesville and Appling Healthcare in Baxley – received grants of $875,000 apiece under the program.

The Georgia HEART Hospital Program awards Georgia income tax credits to individual and corporate taxpayers who contribute to qualified rural hospital organizations (RHOs) located in Georgia. The program, which began in 2017, initially allowed Georgia taxpayers to access $60 million of tax credits, with each qualified RHO having access to $4 million of tax credits until the total annual $60 million cap is met. Beginning in 2023, that annual cap was increased to $75 million.

Beyond Hospital Care

Efforts to bolster rural hospitals are not the only answer to improving healthcare in rural Georgia.

“I think it is important to say that maintaining rural hospitals is critical to rural Georgia, but does every county need a hospital?” asks Dr. Jean Sumner, dean of the Mercer University School of Medicine (MUSM), which was established in 1982 to educate physicians and health professionals to meet the primary care and healthcare needs of medically underserved areas of rural Georgia. “Probably not, but you do need strategically placed hospitals that provide services that are needed to the region. That is really important because when you have to drive 80 or 90 miles, it is difficult, and you may not make it,” she says.

MUSM remains committed to improving rural healthcare whether that is training physicians to staff rural clinics and hospitals or conducting programs to improve health literacy, reduce maternal mortality or address the opioid crisis in rural counties, Dr. Sumner says.

Earlier this year Mercer Medical School and Children’s announced a major initiative focused on improving healthcare for rural Georgia’s youngest residents. Supported by a long-term sustainable fund of $200 million allocated by the Children’s Board of Trustees in 2022, the program provides 10 full-tuition scholarships for Mercer medical students specializing in pediatrics who commit to serving in rural Georgia for at least four years after residency. The funding also supports pilot programs through which Children’s will work with MUSM to help rural hospitals meet criteria to better treat pediatric patients. And it expands behavioral and mental health support by creating access points for rural providers and schools to connect to mental health professionals.

Other improvements to healthcare in rural areas include the establishment of rural clinics staffed by nurse practitioners if physicians are unavailable and increased use of telehealth to connect patients in rural areas with doctors in urban areas.

“You’ll always need city hospitals. You’ll always need tertiary and quaternary hospitals, but having basic care that is equal in quality and easier to access in your hometown is paramount,” says Dr. Sumner.

While these already may be the best of times for some hospitals in population-dense parts of Georgia, such efforts promise to improve healthcare in the rural areas and provide hope that one day Georgia residents will have access to the care they need – in whatever part of the state they call home.