Greenwood Leflore Hospital’s interim CEO says the administration is regrouping to see how the hospital can continue to operate now that the proposed lease to the University of Mississippi Medical Center has fallen through.
Gary Marchand, in an email sent Saturday to the hospital’s employees, tried to reassure them a day after UMMC stunned the Greenwood hospital and the community it serves by announcing it was no longer interested in taking over the hospital’s operation.
“The challenge we now face is to determine what services we are able to offer over the long term while remaining financially viable within the payment structures of the Medicare, Medicaid and commercial insurance programs. Caring for the uninsured residents of our service area will also be a consideration,” Marchand wrote.
He also said the hospital will be seeking financial assistance from the state Legislature and Congress to help keep the nearly insolvent hospital’s doors open.
Lt. Gov. Delbert Hosemann, in a statement to Mississippi Today Friday, did not promise any rescue plan targeted specifically to the Greenwood hospital but indicated the Senate would be looking at how to address the growing crisis in rural health care in Mississippi.
“The financial issues facing health care are becoming universal in our state. We need a universal plan to address them,” he said.
The Center for Healthcare Quality and Payment Reform, a national policy center that advocates for changes in how hospitals are compensated, has estimated that 38 of Mississippi’s 70 rural hospitals are at risk of closing in the near future, and that 24 of these — the highest number in the nation — are at immediate risk of having to shut down.
On Friday, UMMC pulled out of lease negotiations after months of talks with hospital officials that, by all reports, had been nearing their conclusion. UMMC’s announcement came hours after the Greenwood hospital had revealed its decision to lay off up to 80 more employees in an effort to hang on long enough to complete the proposed lease after the first of the year. It was the hospital’s third round of layoffs since May.
UMMC did not provide a specific reason for its change of heart other than to attribute it largely to “the current realities of health-care economics that all health systems are facing in this challenging environment.”
Negotiators had initially been working toward a completion date of December, but that hit a snag late last month when UMMC demanded a roughly $9 million commitment to cover deferred maintenance at the Greenwood hospital and the hospital’s outstanding balance on a loan from the federal Medicare program. Since the hospital, which is jointly owned by Greenwood and Leflore County, did not have the money to meet those obligations, the Greenwood City Council and county Board of Supervisors voted to do so.
In his update Saturday, Marchand said the hospital, before UMMC’s decision to end lease negotiations, had been working on trying to secure unspecified “external funding” that would allow the hospital to continue to operate until the lease could be completed. “The intent was to repay these external funds as the hospital collected its remaining accounts receivable and sold its remaining assets (primarily real estate holdings),” the CEO said.
Officials with the hospital as well as the city and county are now scrambling to come up with an alternative plan that would keep the 208-bed hospital open, presumably as an independent entity.
Harris Powers Jr., the chairman of the hospital board, said Friday that the board was planning to meet by the end of this coming week with city and county officials to discuss their “realistic options.”
The county, acting separately, has asked an Indianapolis health-care consultant to come up with a plan to keep the hospital open.
City Council President Ronnie Stevenson told Mississippi Today that local leaders are not aware of another potential partner to operate the hospital.
“We did not have a Plan B,” he said. “But we’ve got to go find one.”
In the meantime, Stevenson said he expects the hospital to cut more jobs and services in an effort to stave off closure.
- Contact Tim Kalich at 662-581-7243 or tkalich@gwcommonwealth.com.
This is the complete text of Gary Marchand’s email on Saturday to Greenwood Leflore Hospital employees.
Gary Marchand
I wanted to share some additional information with you as we look forward to the next several months, and beyond. The news we received Friday regarding the end of lease negotiations was not expected and we are once again challenged with determining our financial viability.
The purpose of the financial analysis conducted earlier in the week was to identify the external funding necessary for key services to continue while using these funds to sustain operations over the next several months. The intent was to repay these external funds as the hospital collected its remaining accounts receivable and sold its remaining assets (primarily real estate holdings).
Additional financial support was being made available by the city and county to resolve the deferred capital and COVID loan demands of the proposed lease agreement.
The challenge we now face is to determine what services we are able to offer over the long term while remaining financially viable within the payment structures of the Medicare, Medicaid and commercial insurance programs. Caring for the uninsured residents of our service area will also be a consideration. We will continue to look for federal and state financial support, including in the next Congress and upcoming legislative session. As administration reassesses service availability, it is important to remember our purpose is to continue to meet the health-care needs of our residents with the resources we currently have available to us.
We appreciate your service to the community and your patience as we continue to assess our service offerings and financial viability. We will provide further updates throughout the coming weeks and make every effort to keep you informed of these important matters.
