Financial Struggles Force Medical Center to Seek Loan
The Ty Cobb Regional Medical Center is $47M in debt and is seeking a loan from Franklin County to remain open.
- Last week, we covered the closure of Quincy Medical Center, which serves patients in the Greater Boston area. It is scheduled to shut its doors on December 31, 2014 due to declining patient volumes, cuts to Medicare and Medicaid reimbursements and competition. The hospital is expected to lose $20 million by the end of 2014.
This points to the bigger struggle many smaller hospitals face when it comes to generating revenue and keeping the doors open. One such hospital that is facing financial hardship is the Ty Cobb Regional Medical Center in Lavonia, Georgia, which opened two years ago. It has 56 private inpatient rooms, emergency department, wellness facility, critical care unit, four surgical suites and mother/baby units.
However, according to the Anderson Independent Mail, a newspaper in Anderson, South Carolina, the medical center is in a financial hole and may not be able to make its next $300,000 bond payment. The medical center is also $47 million in debt.
To help ease the burden, Franklin County has agreed to accept responsibility for the payments starting on December 1, 2014. However, it does not have the money in its budget and will be looking for a loan from the Franklin County Industrial Building Authority. The Medical Center is also seeking a partnership with a larger hospital system in hopes of getting out of the financial hole.
“It’s no secret that our hospital has been struggling financially, as have many rural hospitals in Georgia,” Greg Hearn, the chief executive officer of Ty Cobb Medical Center, told the news source. “We have been up front with employees and the public.”
According to Hearn, the hospital provides more than $1.5 million in indigent and charity care each year and writes off an additional $8 million for uncompensated services. Reimbursement from Medicare and Medicaid services has also decreased while the number of patients that have difficulty paying has gone up.
The article mentioned that officials are still ironing out the details of the loan agreement. Once finalized, the county will make a loan payment for the hospital.
“It’s a bit of an unusual circumstance,” Frank Ginn, Franklin County’s economic development director, told the news source. “But we want to do what we can to get the hospital through a time crunch and to save those jobs.”
One would think that with more Americans enrolling in healthcare coverage through the Affordable Care Act, hospitals would be able to improve their revenue. However, changing regulations and operational struggles are proving to be a significant struggle. Hospitals need to take the time to ensure best practices and policies to ensure a stable revenue cycle is in place and thriving.
