GEORGE COUNTY, Miss. (WKRG) – The hospital system serving George and Greene counties is not in danger of closing in the near future, according to new national data and the hospital’s CEO.

George Regional Health System (GRHS) is one of the few rural hospitals in Mississippi to consistently be deemed safe over the past year. In October, a report by the Center for Healthcare Quality and Payment Reform said 38 of the 70 rural hospitals in the state were at risk of closing. In the first 2023 data released, 28 are deemed at-risk.

65% of rural hospitals in the state are losing money on care provided to patients. Hospitals are deemed at risk of closing when the losses are forecasted to be unsustainable in the next seven years. 26% of Mississippi’s rural hospitals are at “immediate risk” with enough assets to offset its losses for only two to three years.

“If a hospital is losing money on patient services and they are not getting enough money from other sources to offset those losses, it’s losing money overall,” Harold Miller, president and CEO of the national policy center, told Mississippi Today. “In other words, they owe more than they have.”

Greene County Hospital in Leakesville, operated by GRHS since 2009, has losses on patient services of $121,376 through mid-January, according to the report. George Regional Hospital in Lucedale has a $6.8 million profit margin on patient services. The data does not account for revenue federal grants virtually all healthcare providers received during the pandemic. 

George Regional CEO Greg Havard says most rural hospitals collect 45 to 60% of what they bill. The Lucedale hospital loses around $1 million per month on uncompensated care.

As a nonprofit community health center, it is required by the Affordable Care Act to provide charity care- free or discounted services- to low income patients. The larger issue, both Havard and the national policy center say, is underpayments from private insurance and Medicare Advantage plans.

“Most people don’t realize we don’t set the rates, insurance companies do. We’re really at their mercy of what they will pay. There’s the actual cost of something like a hip replacement and they’ll come back with a different number and say take it or leave it,” Havard said. “Then after the surgery’s done, they’ll still drag it out and we could still go through a whole appeals process to collect payment. Probably 20% of payments they deny for technicalities”

Havard was on the board of the Mississippi Hospital Association and is a member of other healthcare advocacy groups in the state. Many have long pushed for a change to unfunded mandates and other state regulations they say put community hospitals of all sizes at a disadvantage.

One proposed change is to allow community hospitals to band together and form LLCs or other entities that give the providers greater collective leverage to negotiate rates with insurers instead of trying to do so individually.

Blue Cross Blue Shield, the insurer for 55% of all Mississippians with private health insurance coverage, went out of network with the state’s largest hospital, University of Mississippi Medical Center, for most of 2022 as the pair failed to reach an agreement on reimbursement rates from April until December.

On George County’s southern border, the Singing River Health System is seeking a private buyer. The system’s CEO says it is in fair financial shape but with rising costs, facility improvement needs, no negotiation leverage with insurers and a comparatively larger burden of uncompensated care, the future is murky.

Hospital leaders told the Jackson County Board of Supervisors they need a bigger chain to take over so they can benefit from economies of scale and greater negotiating power with suppliers and insurers. If they wait until a crisis point, they’ll have less leverage and possibly fewer interested buyers.

Havard says it shows just how difficult it is for community hospitals to compete when larger, private providers like physician group and venture capitalist-funded ambulatory surgery centers have fewer state mandates to answer to.

Community hospitals, for example, have to operate 24/7 emergency rooms. If a person has complications from an outpatient procedure or can’t see their physician after hours, they will often end up at the ER.

“They get the benefit of being able to negotiate with insurance but then we’re on-call for all their patients without a refund. Where’s the fairness in that?,” Havard said.

A number of policies aimed at supporting hospitals are on the table in the current state legislative session. A bill passed the Senate on Feb. 15 that would inject $80 million in grants to hospitals out of its $400 million balance from the federal American Rescue Plan Act (ARPA) to help compensate for rising costs.

Lieutenant Governor Delbert Hosemann has also proposed:

• Changing “anti-trust” laws or other state legal barriers to “collaboration and consolidation” of hospitals.
• Allocating $6 million for a nurse loan repayment program in an attempt to fill 3,000 nursing vacancies
• Allocating $20 million for nursing programs at community colleges to help fund faculty and equipment needed to increase capacity and get prospective students off waiting lists.
• Allocating $5 million to help with hospital residency and fellowship programs to recruit and retain doctors
• Extending postpartum Medicaid coverage for new mothers from 60 days to a year

Seemingly not on the table after dying in both Republican-controlled chambers is Medicaid expansion to more low-income individuals. Many hospital leaders across the state, and 80% of Mississippians, support the move. It would require about a $100 million state contribution to receive the $1 billion offered by the federal government to expand coverage to 300,000 more people.

Havard is quick to point out that no one proposal would be a silver bullet to keep rural hospitals afloat long-term.

“The death of a hospital is an agonizing sight because it takes so long to happen. It really takes years to get to that point of closure and I think the state hasn’t had that day of reckoning yet. Politicians might be hearing it but not seeing many close yet,” Havard said. “I think some changes- insurance reforms, better regulation- would help all of us.”

George County is one of the few, 20 out of 82, counties in the state to show population growth in the 2020 census. Some counties where hospitals have closed or are at immediate risk have the steepest population declines. Some lawmakers have argued against keeping hospitals afloat where the population does not support its existence.

In 2014, 72% of voters in George County approved to renew a five mill hospital levy to fund a new ER, rehab center and nursing home, OBGYN, radiology and cardiopulmonary departments, gift shop and deli, physician office space, and expanded surgery, lab and dietary areas. State funds helped Ella’s Cafè begin earlier this year and will open a new clinic by August.

Community Medical Center in Lucedale, one of the system’s six clinics, is averaging 65,000 visits each year.

“Our strength is our community that recognizes the value of our local hospital,” Havard said. “Our stockholders are the citizens of the county. We don’t have to pay corporate dividends so we put our money back into the facilities to make sure they’re presentable and can keep offering services that are needed here.”

Havard said being a small community hospital also helps efficiency and decision making. When the COVID-19 vaccine first rolled out, they began distributing it within an hour of receiving them. Their pharmacist jumped on COVID-19 antibody infusions early, using 250 doses per day at the peak of the pandemic to treat patients, outpacing much larger hospitals.

Ultimately, while the system continues to face challenges of increasing costs and uncompensated care, its governing board realizes it will take continued strong financial management and community support without reliance on any other body to keep them in a safe position.