Taking the Pulse of Georgia’s Hospitals

Not far to the northeast, Children’s Healthcare of Atlanta opened the doors in late September to its new 19-story, 2-million-square-foot Arthur M. Blank Hospital – one of the most advanced pediatric hospitals in the country.

Southwest of Atlanta, Piedmont Newnan opened a $65 million tower expansion in May, adding 50 beds and orthopedic, bariatric and general surgery services.

But away from the urban areas, hospitals often struggle for cash and fail to make enough to cover their operating expenses.

For example, Liberty Regional Medical Center in Hinesville, about 43 miles southwest of Savannah, reportedly is debating whether to close its labor and delivery unit.

Should that happen, it’ll join rural hospitals in Donalsonville and Stephens County; both closed labor and delivery units in the past three years.

More than half of Georgia’s rural hospitals are struggling financially, and 18 are at risk of closure, according to a 2024 study by the Chartis Center for Rural Health. The state has lost nine rural hospitals since 2010, putting Georgia third in the nation for closures behind Tennessee and Texas.

Advocating Reform: Dr. Jean Sumner, dean of Mercer University’s School of Medicine. Photo credit: Matt Odom

It’s a common pattern. “In urban environments, you often have surplus, and in rural environments, you never have surplus,” says Dr. Jean Sumner, an internist and dean of Mercer University’s School of Medicine.

At the height of COVID-19, Georgia’s hospitals received more than $705 million in relief. That helped them cope with the public health emergency and the disruption it brought, but it couldn’t resolve the deeper issues. Anna Adams, chief government relations officer for the Georgia Hospital Association, a trade association serving 145 of the state’s 180 hospitals, says even with that assistance, hospital administrators must reassess their path forward in a changing healthcare landscape.

“They’re having to adapt, and some of that is being driven by the insurance companies, which are dictating a lot of patient care,” Adams says. “Hospitals, in their planning, are having to think about who they can partner with at the community level and how they can best provide healthcare access to patients.”

A Merger for All Georgians

Financial Stability: Dr. David Hess, dean of the Medical College of Georgia, says Augusta University Health’s partnership with Wellstar Health System has been beneficial to the community. Photo: contributed

Augusta University Health System is showing how partnership can be a path to a better future. In August 2023, AU Health joined forces with Wellstar Health System and became known as Wellstar MCG Health. Wellstar committed to investing $800 million in AU Health facilities, including a new Columbia County hospital. A year into the merger, Dr. David Hess, dean of the Medical College of Georgia, says the hospital is in the black.

“We didn’t have the capital to do what we wanted,” says Hess. “We wanted a more stable platform for our medical school. We needed accreditation, and the LCME [Liaison Committee on Medical Education] looks at the financial stability of the health system, and now I can say we definitely are.”

Ralph Turner says the merger also allows Wellstar to address physician shortages. Georgia is the nation’s eighth most populous state but ranks 40th in the nation for physicians per capita.

“Most physicians like to stay in the area where they’re trained,” says Turner. “With us being in 11 different hospitals, 300 different primary care clinics across the state and now, joining with Augusta University Medical College of Georgia and being in locations that we haven’t been in, it allows us to help get more trained physicians in rural areas who stay in the state of Georgia.”

Together for Kids

In July, Clinch Memorial Hospital’s emergency department in Homerville celebrated its addition of pediatric care. Clinch was one of eight rural hospitals selected in 2023 to receive funding through the Kids Alliance for Better Care (KidsABC). The county previously had no pediatrician, and for years, the hospital lacked basic equipment – even an infant scale, which is crucial for determining medication dosing. Hospital CEO Angela Handley says parents avoided bringing their children to the hospital.

“There was not a lot of confidence that our ER could provide the pediatric services that we needed to do,” Handley says. “So, of course, they would either bypass us, or our own staff would feel … inadequate to deal with any emergencies.”

KidsABC is a collaboration between Mercer’s medical school, its Georgia Rural Health Innovation Center and Children’s Healthcare of Atlanta; they created a network of rural hospital emergency departments, pediatric offices, regional and state pediatric tertiary care hospitals and school systems. The goal is for families to have access to subspecialty care, mental health care and emergency medical care in their hometowns. Sixty-three of Georgia’s rural counties don’t have a pediatrician, and many of the 57 counties with a pediatrician only have one.

“When a family has to travel from one end of the state to the other to get the care they need, it disrupts the family. It’s expensive, and they just can’t do it. And sometimes they give up.” Dr. Jean Sumner, dean, Mercer University’s School of Medicine

Statewide Coverage: Marc Welsh, vice president of child advocacy at Children’s Healthcare of Atlanta, is leading the rural health initiative KidsABC, which aims to improve access to pediatric care across Georgia. Photo: contributed

Since its eight-hospital launch, KidsABC has expanded to support a total of 35 pediatric providers and family-medicine physicians throughout the state.

“What we have in this collaboration is an opportunity to really move forward access to pediatric care across our state,” says Children’s Vice President of Child Advocacy Marc Welsh, who’s leading the rural health initiative.

The group’s goal is statewide coverage.

“I believe we have a template … that could be a model of how metro areas partner with rural communities to really build infrastructure across our nation,” Welsh says.

Clinch Memorial CEO Handley says the alliance has revolutionized its pediatric emergency care.

“The confidence that we’ve instilled in our staff,” says Handley, “you just can’t put a number on that.”

Support for Rural Hospitals

The state’s executive and legislative branches have also been pumping up rural hospitals. After decades of debate over Georgia’s Certificate of Need (CON) law, Gov. Brian Kemp signed a sweeping legislative package in April, which included loosening restrictions around opening new hospitals. The law introduces new exemptions to the CON process and modifies existing CON regulations. Under CON requirements, health providers must obtain state approval before offering some new services or building or expanding facilities. CON laws effectively grant existing hospitals and other health facilities a competitors’ veto.

A 2023 report by the Georgia Public Policy Foundation found that “CON laws do not contain cost, do not offer adequate and equitable access and do not provide quality improvement.” Additionally, it found no correlation between the reduction of CON laws and an increase in rural hospital closures in the states they examined.

“I think the Certificate of Need as originally written was really an example of an urban policy that got plastered on rural Georgia and just shut down care,” says Sumner, dean of Mercer’s School of Medicine. “I think that reform is really, really good.”

Josh Berlin, CEO of healthcare consulting firm Rule of Three, says the revisions will give rural counties more freedom. “That’s a big deal in a state where we’re really challenged, where there are care deserts, where we can’t get the funding necessary to support rural community health systems.”

But Jeff Myers, president and CEO of Vitruvian Health, a Northwest Georgia nonprofit healthcare system, believes the changes create challenges to Georgia’s hospitals, particularly the nonprofits, which he says carry most of the burden of treating the un- and under-insured.

“Changes to the CON laws attract for-profit providers who target those markets with the highest concentration of insured population,” Myers said in an email. “The for-profit hospitals do not tend to provide the services to the community that lose money. The changes to the CON laws are advocated largely by outside organizations that target profit opportunities, not opportunities to serve the whole community. Therefore, any weakening of CON laws threatens the state’s current medical infrastructure and its ability to serve all in need.”

The legislative package signed by Kemp also expands the Rural Physician Tax Credit to include dentists. Qualifying providers can receive an income tax credit in the amount of $5,000 for every year of employment up to five years. According to a 2022 report at Byte.com, Georgia is one of the five worst states for access to dental care.

The legislature also expanded student loan forgiveness programs for healthcare professionals to include dental students who agree to practice in rural areas. Kemp said the expansion will help meet the needs of students who are critical to overlooked areas in Georgia.

Medical school debt is attracting attention as the U.S. faces a forecasted deficit of at least 86,000 physicians by 2036. Last year, U.S. medical students graduated with an average debt of $206,924 – a burden that could deter some from pursuing medicine.

Family medicine resident Dr. Mary Catherine Barnes Stewart graduated from Mercer’s medical school in 2023 with about $150,000 in debt, despite a scholarship that covered nearly 100% of her tuition. She says most of her classmates are $300,000 to $500,000 in debt. Stewart is in the second year of her residency – the first was in Savannah, and she’s now at Memorial Satilla Health in Waycross, close to where she grew up. Stewart says tax credits and loan forgiveness programs are welcome relief.

“The salary for residency is very minimal,” says Stewart. “When you add up the hours you work during a week and what you’re paid, it’s close to a minimum wage job.”

Take HEART

Fighting to Provide Care: Damien Scott, CEO of Emanuel Medical Center. Photo credit: Frank Fortune

Georgia lawmakers also gave a boost this year to a program rural hospital administrators describe as “essential” and “a gamechanger” – the Georgia HEART Hospital Program. Since 2017, Georgia has given income tax credits to individuals and corporations who donate to the state’s 54 rural hospital organizations. An individual filer can get up to $5,000 in tax credits, married filing jointly up to $10,000. In April, lawmakers extended the program through 2029 and increased the annual cap from $60 million to $100 million.

Nearly 10 years ago, Emanuel Medical Center in Swainsboro closed its labor and delivery unit. CEO Damien Scott says the income just wasn’t there.

“We have really fought to [continue to] offer ob-gyn care,” which Scott says they do five days a week. “But it comes at a significant cost for us. We subsidize that clinic heavily and wouldn’t be able to do that without HEART. We wouldn’t have mammography or have new colonoscopy equipment.”

Scott says the program is so important, he checks the HEART site twice a day. Emanuel is on track to receive $1 million this year.

Wendy Martin, CEO of Jefferson Hospital in Louisville, says the $850,000 it received last year allowed the hospital to meet payroll and “actually keep the doors open.” Coffee Regional Medical Center in Douglas used its nearly $3 million to add a second cardiac catheter lab. And Colquitt Regional Medical Center used HEART money to build a radiation center, allowing patients to get treatment near home.

Eligible hospitals solicit potential donors. At Washington County Regional Medical Center in Sandersville, CEO Pam Stewart says she’s asked area CPAs to spread the word to their clients. And Colquitt Regional CEO Jim Matney says 75% of employees at the center direct their taxes to Georgia HEART.

“It’s nothing out of pocket,” says Alan Horton, CEO of Putnam General Hospital in Eatonton. “It’s just a redirection of their tax obligation.”

“That program works so well because it requires that the community be a part of investing in the hospital,” says GHA’s Adams. “And when those community members have skin in the game on the health and viability of their hospital, it inherently raises awareness about health outcomes in general.”

“It’s been a lifeline for the hospitals,” says Emanuel’s Scott, “and it’s an example for other states.”

2025 Legislative Issues

Hospitals are still looking for relief from other daunting challenges. In August, a Union County jury awarded $47 million in damages to a woman who lost her left arm and leg nine years ago to a bacterial infection contracted during stays at Union General Hospital and Union County Nursing Home. Union General’s share: $23.5 million.

“That amount of money as an award is enough to close a rural hospital,” says Adams, “and so the physicians are hesitant to go to rural areas where they don’t have backup, and they can’t afford the malpractice. It’s really driving physicians not just out of rural Georgia, but out of Georgia completely.”

Adams says healthcare liability reform is at the top of the GHA’s legislative agenda for 2025.

“We’re looking to come up with some reforms… not to reduce the number of lawsuits, because if a patient is harmed, we absolutely want to preserve their ability to be awarded damages for that, but when it does go to trial, ensuring that the process and award are fair for all parties,” she says.

Also high on GHA’s agenda is expanding access to care.

“There’s been a lot of discussion about Medicaid expansion,” says Adams. “There’s been discussion about waivers, and from a GHA perspective, we are open to any and all the above, so long as we are getting more people coverage so that they can seek the appropriate care in the appropriate setting.”

Georgia has the fifth-highest percentage of people under 65 without health insurance, according to 2022 U.S. Census Bureau data, with 1.2 million people who are uninsured. The state is one of 10 that has not expanded Medicaid coverage under the Affordable Care Act. And a Georgetown University study shows that Georgia has dropped more than 300,000 children from Medicaid since the COVID-related Medicaid continuous coverage protections were lifted.

Rather than fully expand Medicaid, Georgia secured a waiver to provide coverage to a subset of low-income adults through its Georgia Pathways to Coverage program. As of June, the program had about 4,300 enrollees out of a potential 345,000 eligible state residents. Expanding Medicaid is often promoted as a way to help rural hospitals expand their payer base. The Center for the Study of Human Health at Emory University says 74% of hospital closures occur in states that have not expanded Medicaid or have had Medicaid for less than a year.

Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, says Medicaid expansion would help, but not solve, cash flow problems at rural hospitals as Medicaid payments don’t cover actual costs. Miller says the real problem is underpayment by all insurance plans.

“Uninsured patients are a relatively small piece of what hospitals are losing money on. It’s not unimportant. It’s just small. It’s not like the hospital doesn’t lose any money on the patients on Medicaid. They just lose less than if they had no insurance at all. And my concern is people are over-focused on that as a solution for rural hospitals,” he says.

Rural healthcare has another daunting challenge. “A lot of people think [the main issue] is money. It’s not money. It’s the workforce,” says Colquitt CEO Matney. “Trying to get people to move to a rural area.”

According to the National Institutes of Health, rural communities struggle with recruiting and retaining healthcare providers. Fewer than 12% of U.S. physicians practice in rural areas. Georgia is expected to have the fifth-largest healthcare worker deficit in the country by 2028.

“Workforce is huge,” says GHA’s Adams. “We don’t have the ability to educate these clinical workers fast enough.”

Matney says Colquitt Regional Medical Center used HEART funds to address the problem head-on by building a medical education center on its campus to train its own workforce.

“Just because we live in a rural area,” says Matney, “our kids shouldn’t have to go away to go to school. If we can provide opportunities to educate our children here, then they’ll stay close to home.”

“The biggest challenge that rural healthcare has – a lot of people think it’s money. It’s not money. It’s the workforce. Trying to get people to move to a rural area.” Jim Matney, CEO, Colquitt Regional Medical Center

Medicare (dis)Advantage

Like any business, hospitals want to limit their accounts receivable days, the days it takes a customer to pay a bill, keeping them as low as possible. Without cash, a hospital can’t pay its bills. Yet many administrators say managing cash flow has become increasingly difficult due to Medicare Advantage (MA).

Educating the Public: Monty Veazey, president and CEO of the Georgia Alliance of Community Hospitals. Photo: contributed

When asked how big a problem MA is, Upson Regional Medical Center Controller Jason Gassett chuckled and asked, “How long do you have?”

“They don’t pay,” says Colquitt Regional Medical Center CEO Jim Matney. “Right now, I’ve got $6.8 million of accounts receivable that’s over 120 days owed.”

“It’s having a devastating, negative financial impact on hospitals,” says Monty Veazey, president and CEO of the Georgia Alliance of Community Hospitals. “When you have a rural hospital that has $6 million on the books that’s 180 days old, it cripples them, and that’s what’s happening out there.”

Complaints go beyond payments to claim denials and delays in pre-authorization.

“They will keep the patient in an acute care setting and not give the authorization to move a patient to a lower level of care,” says Dr. Karen McColl, chief medical officer at Memorial Health Meadows Hospital in Vidalia. “Do I think that’s purposeful? I don’t know. It seems to happen a lot. We see two, three, four extra days waiting to move a patient. That’s very frustrating for us when we have patients who are ready for discharge, and we have people in the ER who are waiting for a bed.”

Vicki Lewis, president and CEO of Coffee Regional Medical Center in Douglas, says seniors are attracted by MA’s lower premiums. “When they’re sold MA, they think it’s going to be very much like traditional Medicare, and it just isn’t,” she says.

MA enrollment has been on a steady rise over the past two decades and is now at 32.8 million enrollees – 54% of the eligible Medicare population. That number is expected to hit 60% by the end of the decade.

“These plans are reaching out to the elderly population, and they’re telling them, ‘This is going to be so amazing. It will save you money. You’re going to have access to all of your same physicians.’ But what they don’t realize is that they’re also going to be missing out on services, and at that point, they’re already invested in the plan, they’ve purchased it, and it’s too late,” says GHA’s Adams.

Several administrators said they’ve reached out to their legislators, and Veazey says they’re considering taking out ads to discourage seniors from signing up for MA.

“We’ve got to do something to educate people about the disadvantage of Medicare Advantage,” he says. “We’re losing a lot of money.”