Georgia’s Health Challenges

“We joke about this all time – there is really never much good news for rural hospitals,” she says, adding with a wry chuckle, “seems like it’s always bad news.”

It’s because rural hospitals, particularly the smaller ones, are historically pressed by financial instability, workforce issues, demographic challenges and harmful policy decisions at the state and federal level, among other things.

All of this fuels a cycle of vulnerability that often leads to facility closures and reductions in clinical services. In Georgia, nine rural hospitals have closed since 2010.

Stewart is used to the bumpy ride. So, when H.R. 1 – otherwise known as the One Big Beautiful Bill – was enacted by Congress on July 4, she did not wring her hands or hyperventilate. She just went back to work.

“We’ve got plenty to do and we aren’t exactly sure how the bill is going to impact us yet, anyway, which puts us in the same boat with other hospitals,” Stewart says.

It’s a pretty big boat in Georgia, filled with a diverse range of hospitals and healthcare systems, all of them bracing for whatever H.R. 1 has to offer, or take away. And while rural hospitals continue navigating choppy waters, or linger on life support, larger systems in more urban settings are consolidating and reorganizing to meet the needs of their communities.

Expansions Underway: Pam Stewart, CEO of Washington County Regional Medical Center, where the emergency department is undergoing a renovation. Photo credit: Matt Odom

Winning by Losing

Georgia was one of 10 states that did not expand Medicaid after passage of the Affordable Care Act under President Barack Obama. That decision by the state legislature has cost Georgia billions in federal funding and economic activity, taking a human toll as well in the form of poor health outcomes.

But Georgia probably won’t be as significantly affected by H.R. 1 as states that chose to expand Medicaid.

“We may actually be better positioned than many other states because of some of the decisions made by our legislators,” notes Caylee Noggle, president and CEO of the Georgia Hospital Association.

Still, the reductions in federal spending for healthcare outlined in H.R. 1 are steep: roughly $1 trillion from Medicaid and ACA marketplaces over the next 10 years, which will result in around 15 million people who are eliminated from programs nationally.

Georgia stands to lose more than half a billion dollars in Medicaid funding by the end of 2034. Estimates for the number of people projected to lose access to health insurance by then ranged from 310,000 up to 750,000, if the ACA tax credits expire at the end of 2025 as planned.

“That would be devastating,” says Noggle, who views hospitals as critical infrastructure in Georgia, packing a $137 billion economic impact – although about half of the state’s rural hospitals are struggling financially. “It would mean people who can no longer afford insurance will show up in emergency rooms with no coverage. And if one thing goes and impacts financing, it can impact everything – it’s like a house of cards.”

Noggle adds, “But there’s still a lot of uncertainty about how H.R. 1 will be implemented and what it will mean for Georgia specifically.”

In Medicaid expansion states, the ACA helped strengthen state budgets, boosted healthcare system finances, lowered uninsured rates and improved the overall health of residents. Now those states will likely feel the pain more acutely than Georgia – for one thing, they’ll have to impose work requirements tied to Medicaid coverage by 2027.

In 2023, a decade after the Affordable Care Act was implemented, Georgia launched its version of a Medicaid expansion. Pathways to Coverage targets low-income adults, ages 19-64. To qualify, individuals meet minimum activity requirements, like going to school, volunteering or working. Pathways made Georgia the first state to impose work requirements on Medicaid recipients.

However, according to the Georgia Public Policy Institute, restrictive eligibility requirements have contributed to low participation. And the program spends more on upgrades to its cumbersome online enrollment system than it does on actual healthcare benefits.

Serving Uninsured Patients: John Haupert, president and CEO of Grady Health System. Photo credit: Contributed

“Georgia already is the poster child for work requirements and will probably feel less of an impact than other states that expanded Medicaid,” says Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, a nonprofit policy research organization. “In those states, the work requirements will be a new thing.”

But there are 50 different statewide Medicaid programs in the U.S., and none are wired alike, says John Haupert, president and CEO of Grady Health System. He worries Congress used a hatchet instead of a scalpel when shaping H.R. 1’s healthcare provisions.

Grady serves more uninsured patients than any other Georgia hospital, providing over $270 million in uncompensated care each year. Haupert says if Georgia had expanded Medicaid, many uninsured residents would have gained coverage through the ACA.

“Federal dollars could have flowed into Georgia,” he notes, adding that both Grady’s finances and patients’ access to would have improved. Still, he concedes that “if we look at this issue through one point in time, the impacts of H.R. 1 would probably be worse if Georgia had expanded.”

In other words, Georgia has less to lose than most of the country, which is kind of like dodging a speeding ticket by never starting the car.

Holding the Line

Noggle is encouraged by the potential of at least one aspect of H.R. 1 – the $50 billion Rural Health Transformation Fund. According to the Center for Medicare and Medicaid Services, half will go equally to states that have submitted an approved application, and half will be based on a number of factors, including rural population.

“But there still hasn’t been a lot of clarity over which states will be approved for funding,” says Zachary Levinson, project director at the Kaiser Family Foundation, a nonprofit organization that focuses on health policy analysis and research. “We don’t know how much each state will get or if that amount will align with what each state’s needs are.”

Kaiser estimates the funds could only offset about a third of the cuts to rural Medicaid spending.

Nonetheless, H.R. 1’s transformation fund represents “a good opportunity for Georgia to be strategic and intentional and thoughtful about how we invest in rural health care,” according to Noggle.

About 80 years ago, Congress created a strategic, intentional and thoughtful piece of legislation called the Hill-Burton Act of 1946. It transformed healthcare in the U.S., building or modernizing rural infrastructure, funding construction, requiring participating health systems to provide free or reduced-cost care and to generally operate without discrimination, ultimately leading to civil rights progress.

The Hill-Burton Act built the physical backbone of American healthcare before the program ceased in 1997. Its legacy is still felt across Georgia, where dozens of rural hospitals were originally built with Hill-Burton assistance – including some that are struggling now, like Irwin County Hospital in Ocilla.

Overcoming Obstacles: Chris Paulk, chair of the Irwin County Hospital Authority and county commissioner. Photo credit: Kevin Garrett

“It would be like pushing a boulder uphill if we didn’t have a hospital in this community,” says Chris Paulk, who chairs the local hospital authority and serves on the board of commissioners in Irwin County, where he runs the family muscadine vineyard and products company his grandfather launched in the 1970s.

“Losing this hospital would give us another challenge to overcome and make economic development here very difficult,” Paulk says. “So, we’ve done what we can to keep the doors open.”

In 2023, Irwin County Hospital became the first in Georgia to join the Rural Emergency Hospital program, which provides financial support and higher Medicare payments to rural hospitals that stop providing inpatient services and focus on 24/7 emergency care. Participation limits access to other funding sources, however, including drug discounts.

“It’s been a challenge for us, balancing services with ever-growing costs,” says Paulk, a Georgia Tech grad who stayed in Atlanta for a year or two after school. “In Metro Atlanta, momentum builds momentum. Down here, it’s like the momentum forgets you.”

Now Irwin County is transitioning out of the Rural Emergency Hospital program, “and we’re going back to a transitional small hospital model,” Paulk says. Transitional small hospitals typically provide intermediate care, emphasizing coordinated, nurse-led, multidisciplinary services like therapy, medication management and patient education with the goal of reducing readmissions and supporting recovery – ultimately improving outcomes and lowering healthcare costs. “We’re hoping that will open other lines of revenue for us. But right now, the future feels unknown and unstable,” Paulk says.

Rural Resilience

Irwin County Hospital is one of four in rural Georgia considered most at-risk of losing money, along with Fannin Regional Hospital in Blue Ridge, Flint River Community Hospital in Montezuma and Washington County Regional Medical Center in Sandersville.

Washington County Regional Medical Center CEO Stewart isn’t buying it.

“That report was based on old data,” she says. In 2022, the Sandersville hospital began partnering with Georgia-based management company Aletheia Health Partners.

“It’s made a huge difference,” Stewart says. “They’ve set us on a course of sustainability. We’ve eliminated contract nursing in the emergency department and almost all contract staffing in medical surgery. Now all those nurses are ours, and that’s a huge cost reduction.”

Prioritizing Workforce: Anna Adams, chief government relations officer for the Georgia Hospital Association. Photo credit: Ben Rollins

The 56-bed hospital – another Hill-Burton beneficiary – has also brought in new specialists, added state-of-the-art MRI services and focused on securing funds from the Georgia HEART Hospital Program, which provides financial support to rural and critical access hospitals.

“We’ve improved our financial and operational status,” Stewart says. In fact, the hospital is now profitable.

A $15.5 million bond from the Washington County Commission is helping the hospital acquire new equipment, expand and improve the emergency department and remodel inpatient rooms, among other improvements.

The hospital serves three contiguous, economically stressed counties that don’t have a hospital – Glascock, Hancock and Johnson. Stewart, who grew up in Sandersville and used to go to work with her mother, a dietitian at the hospital, can’t imagine her community without Washington Regional.

In addition to offering scholarships to licensed practical nurses who are interested in becoming registered nurses, Stewart says the hospital is planning to bring back a teenage volunteer program to help students learn about healthcare careers. Stewart was a teenage volunteer at the hospital and later chief nursing officer before becoming CEO in December 2023.

“If we closed, what kind of burden would that put on our community, or the larger hospitals in our region, who are already at maximum capacity? The way I see it, we’re necessary,” Stewart says.

And she has allies from urban Georgia fighting for rural hospitals as well. Democratic Rep. Viola Davis, a registered nurse and Army veteran who serves District 87 in DeKalb County, says the stakes are high and warns that failing to stabilize rural healthcare could bring “a tsunami of suffering” to communities already struggling.

“Healthcare is a right as far as I’m concerned, especially for our children, elderly and disabled,” Davis says, urging the state to use surplus funds and smarter tax credits to help rural hospitals stay open.

Beyond financing, Georgia hospital leaders worry about whether there will be enough people to keep the system running.

“Workforce is probably one of our top concerns,” says Anna Adams, chief government relations officer for the Georgia Hospital Association. “We lost a lot of workers after COVID because of burnout, and many of our physicians are aging out. The projection is that Georgia will be short roughly 239,000 healthcare workers by 2032.”

“Southeast Georgia is growing rapidly and we’re grateful for that, and we want to meet the healthcare needs of this region. So – to use a Wayne Gretzky ice hockey term – we’re skating to where the puck is going to be.” – Brad Talbert, CEO, Memorial Health

Growing with Purpose

Hospital consolidation, most of it directed by systems in North Georgia and Metro Atlanta, is reshaping the state’s healthcare landscape. It’s part of a national trend as financially stressed hospitals seek stability by joining larger systems.

Mergers – like Emory Healthcare’s acquisition of Houston Healthcare and Wellstar’s partnership with Augusta University Health – illustrate how health systems are expanding their footprints to gain efficiency and market power. While such consolidations raise concerns about reduced competition and higher costs for patients and insurers, they often are framed as improving a system’s coordination and sustainability.

“For many of those communities who have a larger system come in and offer support and help, it’s the lifeline that’s keeping those services open and available to those patients within that community,” says Adams.

Piedmont Healthcare’s lifeline extends into communities that contain 85% of Georgia’s population, and the system has made $1.5 billion in capital investments over the past four years.

Recent developments include a new children’s hospital in Columbus, a bed tower in Newnan, the reopening of emergency and acute care services at Piedmont Summerville in Augusta and two additional patient floors in Cartersville. The system also opened a new campus in Ellijay that includes an ER and ambulatory center and a new urgent care in Locust Grove. Additional expansions are underway, including new bed towers and operating room upgrades at Piedmont Henry in Stockbridge and Piedmont Fayette in Fayetteville.

With more than 2,000 locations – clinics, ambulatory centers, imaging centers, etc. – Piedmont hasn’t finished growing. It has plans to add dozens of new primary care, specialty care offices and urgent care centers across the state over the next few years.

“By providing an integrated care model, we have been able to demonstrate a system of care that both improves quality and reduces the total cost of care,” Piedmont Director of External Communications John Manasso says. “We have never closed an acquired hospital and have expanded access to care in every community that we have been invited to serve.”

At Gainesville-based Northeast Georgia Health System, a similar mission is guiding efforts to preserve access to rural care. In the past nine years, NGHS has acquired hospitals in Habersham, Barrow and Lumpkin counties.

“Each situation had its own unique nuances – but the bottom line is NGHS stepped in to save the local hospital for each of those communities,” says Matt Hanley, president and CEO. “Our philosophy has always been to support the community hospitals in our service area versus compete, but if they falter, we feel it’s our responsibility, as the safety net system for our region, to help ensure access to care.”

Access to Care: Matt Hanley, president and CEO of Northeast Georgia Health System. Photo credit: Eric Sun

That net may need to be stretched a little with the announcement in September that St. Mary’s Sacred Heart Hospital in Lavonia would end maternal health services, citing physician shortages and Medicaid cuts under H.R. 1. While the move reflects a broader trend of rural hospitals closing labor and delivery units amid financial strain, Hanley says NGHS is working to close maternity gaps in Northeast Georgia.

“Our hospitals in Gainesville, Braselton and Habersham County all provide labor and delivery services,” he says. “We operate a grant-funded clinic in Barrow County to provide obstetrics care exclusively for Medicaid patients, and we partner with several other nonprofit indigent care clinics across the region that support women’s health.”

NGHS also was instrumental in creating a group called HOPE (Healthy Outcomes and Positive Experiences) for Georgia Moms, which encourages providers to collaborate and share data to improve maternal outcomes and reduce maternal mortality across Georgia.

“We believe rural healthcare is vital to keeping Georgia strong,” Hanley says. “So we’re doing all we can to support it.”

Skating to the Puck

Memorial Health in Savannah was on the brink of financial collapse before it was acquired by HCA Healthcare in 2017. The Nashville-based, for-profit hospital chain paid $710 million for the system and its large safety-net centerpiece, Memorial University Medical Center. Now, the once-struggling health system in Southeast Georgia is undergoing a massive expansion.

“Southeast Georgia is growing rapidly and we’re grateful for that, and we want to meet the healthcare needs of this region,” says Memorial Health CEO Brad Talbert. “So – to use a Wayne Gretzky ice hockey term – we’re skating to where the puck is going to be.”

Memorial is going after several pucks at once, aiming to score a hat trick with a three-pronged approach to stay ahead of the Savannah region’s booming growth:

• It’s making a major infrastructure play with construction of a $265 million, five-story tower that will add 90 beds in 2028 and a 1,000-space parking garage, part of HCA’s $1 billion in capital investments in the region since 2018.
• It’s investing in workforce development with the opening of the Galen College of Nursing at a new medical facility in Pooler, strengthening the regional talent pipeline while adding outpatient services in that community.
• It’s improving regional access to care with the development of new freestanding emergency departments in Pooler and Richmond Hill, slated to open in early 2027.

“We will cover the transportation for any patient that needs to be admitted to the hospital for further treatment – there is no out-of-pocket expense for that,” Talbert says. “And we’ll transport them directly to a bed – they won’t wait in another ER.

“Expanding access to emergency care in those two high-growth communities, where there currently isn’t any emergency care, is a key strategy for us,” he adds. “And we think it’s going to transform those communities.”