Another hospital closing

[namethatsmell]

This seems bad

Atlanta Medical Center to end operations in November, Wellstar says

In a news release, Wellstar said the decision came after "pursuing every opportunity for an alternative path forward."

www.11alive.com

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Members don't see this ad.

 

[RustedFox]

Sure does.

 

[BoardingDoc]

This seems bad

Atlanta Medical Center to end operations in November, Wellstar says

In a news release, Wellstar said the decision came after "pursuing every opportunity for an alternative path forward."

www.11alive.com

Wow. Grady is going to go from "usually chaotic" to "complete dumpsterfire" real quick.

 

[GonnaBeADoc2222]

It worked out super great with Hannemann in Philly!

 

[southerndoc]

The residency programs are being shifted to other Wellstar hospitals pending ACGME approval. Core faculty will remain the same from what I've heard.

Although this is part of my health system, I am not commenting in an official capacity.

Grady is quick to point out that they are the safety net of Atlanta and criticize Wellstar for putting profits before serving the community, but Grady always fails to mention the millions of dollars in funding they receive for indigent care. One year they had to get $10 million from Fulton County just to make ends meet with their week's payroll (Fulton commission to give Grady $10 million to meet payroll ). I never saw the county/city offer to help Wellstar with the indigent care or fund the hospital like they do with Grady.

Crap, the state gives Grady $3-5 million per year to operate a "Georgia Coordinating Center" that nobody uses that probably costs them less than $500k/year to operate.

 

[wholeheartedly]

The residency programs are being shifted to other Wellstar hospitals pending ACGME approval. Core faculty will remain the same from what I've heard.

Although this is part of my health system, I am not commenting in an official capacity.

Grady is quick to point out that they are the safety net of Atlanta and criticize Wellstar for putting profits before serving the community, but Grady always fails to mention the millions of dollars in funding they receive for indigent care. One year they had to get $10 million from Fulton County just to make ends meet with their week's payroll (Fulton commission to give Grady $10 million to meet payroll ). I never saw the county/city offer to help Wellstar with the indigent care or fund the hospital like they do with Grady.

Crap, the state gives Grady $3-5 million per year to operate a "Georgia Coordinating Center" that nobody uses that probably costs them less than $500k/year to operate.

now grady can ask for more money

 

[miacomet]

Is this a real estate grab? Is the Wellstar facility in a hot neighborhood?

 

[namethatsmell]

It worked out super great with Hannemann in Philly!

Remarkable that we're getting our 2nd lesson in 3 years on how a major safety net hospital can be obliterated in one of the 10 largest metros in the country.

While $4 trillion/yr is spent on healthcare.

How many more of these shops will need to close before people wake up and ask where the money is going?

And in the background:
a) ~20% of healthcare workers quit since the pandemic started...and there are plenty of docs/nurses that want to get out who haven't quit yet
b) >20% of the country will be over 65 by 2030

Coming years in our sphere are going to be spicy

 

[RustedFox]

Remarkable that we're getting our 2nd lesson in 3 years on how a major safety net hospital can be obliterated in one of the 10 largest metros in the country.

While $4 trillion/yr is spent on healthcare.

How many more of these shops will need to close before people wake up and ask where the money is going?

And in the background:
a) ~20% of healthcare workers quit since the pandemic started...and there are plenty of docs/nurses that want to get out who haven't quit yet
b) >20% of the country will be over 65 by 2030

Coming years in our sphere is going to be spicy

 

[ShockIndex]

Grady and the the Atlanta Mayor’s Office accused Wellstar of putting profits over patients. Meanwhile, the AMC had a $100M operating loss last year. Good luck solving this problem Atlanta…

 

[EctopicFetus]

I dont know the specific atlanta market but seemingly they are reaping what they sowed.

 

[emergentmd]

Putting profit before patients. What a joke of an accusation. Where is the 100M coming from? If you are losing 100M/yr, only financially illiterate people would keep it open. Its a failed business, close it down or let the government who can print money keep funding it.

 

[Mount Asclepius]

Unless any of you have upper level inside information, forming a strong opinion on this is conjecture. This is potentially more complex than this thread would suggest.

I’d guess @southerndoc has a better feel for this than any of the rest of us given proximity, but as EPs we aren’t usually privy to the hospital finances and most of the politics at play.

 

[southerndoc]

As @emergentmd pointed out, you can't keep operating with a net loss like that. The only hospital in Atlanta that operates at a net loss and continues to operate is Grady... because they get bail out funding from Fulton and DeKalb Counties.

 

[benem]

I think Atlanta Medical Center was always hampered by the fact that it could never attract privately insured patients and offered few flagship speciality services. Why would you go there when you have Emory and Piedmont minutes away with private rooms and nicer facilities? AMC never had a transplant program, never had a large cancer program, it was largely just a hospital for low income Atlanta residents who had Medicaid or Medicare and weren’t forced to go to Grady. Tenet has essentially led to two dumpster fire AMC collapses in Hahnemann and Atlanta. They also screwed up Creighton in Omaha and St. Louis University Hospital. I worry about DMC in Detroit. Detroit Receiving and Sinai-Grace historically were considered very strong residencies and I think those hospitals have severe operational and financial challenges with for profit ownership.

 

[Franzd'Epinay]

The residency programs are being shifted to other Wellstar hospitals pending ACGME approval. Core faculty will remain the same from what I've heard.

Although this is part of my health system, I am not commenting in an official capacity.

Grady is quick to point out that they are the safety net of Atlanta and criticize Wellstar for putting profits before serving the community, but Grady always fails to mention the millions of dollars in funding they receive for indigent care. One year they had to get $10 million from Fulton County just to make ends meet with their week's payroll (Fulton commission to give Grady $10 million to meet payroll ). I never saw the county/city offer to help Wellstar with the indigent care or fund the hospital like they do with Grady.

Crap, the state gives Grady $3-5 million per year to operate a "Georgia Coordinating Center" that nobody uses that probably costs them less than $500k/year to operate.

$15 million is not nothing, but it doesn't make up for the quoted $100 million, though.

Any reason why the government didn't also help fund AMC?

 

[Fpg1245]

$15 million is not nothing, but it doesn't make up for the quoted $100 million, though.

Any reason why the government didn't also help fund AMC?

For profit medical centers don’t get the benefit of state help the way non profits do.

For the state or city or local govt to dole out money to an ailing hospital they are gonna wanna see the books and these places may not be willing to share that with them.

 

[southerndoc]

For profit medical centers don’t get the benefit of state help the way non profits do.

For the state or city or local govt to dole out money to an ailing hospital they are gonna wanna see the books and these places may not be willing to share that with them.

We are not a for-profit health system.

 

[Fpg1245]

We are not a for-profit health system.

🤔 forgive me wellstar is non profit.

I guess the patients will just flood the next safety hospital until that one closes because I’m assuming these hospitals will never recoup the cost of services. Plus isn’t Atlanta a growing metro?

 

[southerndoc]

I guess the patients will just flood the next safety hospital until that one closes because I’m assuming these hospitals will never recoup the cost of services. Plus isn’t Atlanta a growing metro?

Well if they go to Grady they will have DeKalb and Fulton Counties bail them out as usual.

 

[Apollyon]

Well if they go to Grady they will have DeKalb and Fulton Counties bail them out as usual.

I don't know "Hot-lanta". Does Grady have multiple campuses, with separate locations in Fulton and DeKalb counties, or is it one of those goof ball setups where the one building spans a county line? Or, is it a third option, where the hospital is wholly in one county, but provides services for residents of the other county, which is why the second subsidizes the first?

 

[benem]

I don't know "Hot-lanta". Does Grady have multiple campuses, with separate locations in Fulton and DeKalb counties, or is it one of those goof ball setups where the one building spans a county line? Or, is it a third option, where the hospital is wholly in one county, but provides services for residents of the other county, which is why the second subsidizes the first?

Grady has one acute care campus in Fulton County. DeKalb County partially owns Grady indirectly through the Fulton-DeKalb Hospital Authority. Essentially Fulton and DeKalb Counties guarantee Grady’s bonds so they’d be on the hook if the hospital failed.

 

[HemeOncHopeful19]

You can see their filings here if you want to see just how much their admin is bringing home.

Wellstar Atlanta Medical Center Inc - Nonprofit Explorer - ProPublica

Since 2013, the IRS has released data culled from millions of nonprofit tax filings. Use this database to find organizations and see details like their executive compensation, revenue and expenses, as well as download tax filings going back as far as 2001.

projects.propublica.org

 

[BoardingDoc]

You can see their filings here if you want to see just how much their admin is bringing home.

Wellstar Atlanta Medical Center Inc - Nonprofit Explorer - ProPublica

Since 2013, the IRS has released data culled from millions of nonprofit tax filings. Use this database to find organizations and see details like their executive compensation, revenue and expenses, as well as download tax filings going back as far as 2001.

projects.propublica.org

Not really. Most of their top tier execs have salaries listed at $0. They are clearly being compensated via some other mechanism which is not disclosed here.

 

[HemeOncHopeful19]

Not really. Most of their top tier execs have salaries listed at $0. They are clearly being compensated via some other mechanism which is not disclosed here.

? I mean the form I’m looking at lists their CEO at $2.4 million, HR chief 700k, Senior VP of nursing $540k…

 

[Fpg1245]

Not really. Most of their top tier execs have salaries listed at $0. They are clearly being compensated via some other mechanism which is not disclosed here.

Yeah bypassing these mechanisms for tranparancy is basically obstruction and fraud.

 

[maxxor]

The residency programs are being shifted to other Wellstar hospitals pending ACGME approval. Core faculty will remain the same from what I've heard.

Although this is part of my health system, I am not commenting in an official capacity.

Grady is quick to point out that they are the safety net of Atlanta and criticize Wellstar for putting profits before serving the community, but Grady always fails to mention the millions of dollars in funding they receive for indigent care. One year they had to get $10 million from Fulton County just to make ends meet with their week's payroll (Fulton commission to give Grady $10 million to meet payroll ). I never saw the county/city offer to help Wellstar with the indigent care or fund the hospital like they do with Grady.

Crap, the state gives Grady $3-5 million per year to operate a "Georgia Coordinating Center" that nobody uses that probably costs them less than $500k/year to operate.

This was just before Grady legitimately went bankrupt in 2010-2012 era which required a package deal to privatize the hospital under the new Grady Memorial Foundation. It is no longer run by Fulton County.

Wellstar only took over this place post 2016. Not sure how much the state/counties are giving Grady these days, but it isn't quite fair to compare that far back in time...

I do think Wellstar never wanted to buy any of the 4 Tenet hospitals other than North Fulton and now is trying to dump the dead weight. It would be somewhat interesting if a similar coalition has Grady take over AMC...

Edit: I went and google refreshed my memory. It was 2008-2009 that the bailout, lease, and privatization happened.

 

[BoardingDoc]

? I mean the form I’m looking at lists their CEO at $2.4 million, HR chief 700k, Senior VP of nursing $540k…

Weird. I just opened up the pdf of the actual filling and can find the numbers you listed. On the website itself (without going into the actual 109 page tax filing PDF), it gives a list of all key employees as well and lists the CEOs salary as 0 as I mentioned above.

 

[benem]

This was just before Grady legitimately went bankrupt in 2010-2012 era which required a package deal to privatize the hospital under the new Grady Memorial Foundation. It is no longer run by Fulton County.

Wellstar only took over this place post 2016. Not sure how much the state/counties are giving Grady these days, but it isn't quite fair to compare that far back in time...

I do think Wellstar never wanted to buy any of the 4 Tenet hospitals other than North Fulton and now is trying to dump the dead weight. It would be somewhat interesting if a similar coalition has Grady take over AMC...

Grady is leased to a not for profit for 40 years which was given around 250 million following almost closing. Northside Hospital and Wellstar’s Kennestone/Cobb/Douglas/Paulding hospitals are all leased to not for profit hospital systems by public authorities as well.

 

[maxxor]

Grady is leased to a not for profit for 40 years which was given around 250 million following almost closing. Northside Hospital and Wellstar’s Kennestone/Cobb/Douglas/Paulding hospitals are all leased to not for profit hospital systems by public authorities as well.

Correct.

Prior to almost closing, Grady was directly run by Fulton-Dekalb hospital authority.

If AMC is so important as a safety net, it would seem to me that the county should buy it and then give it to Grady Memorial foundation to run.

But my suspicion is the physical plant is in such bad shape that it might be better to just tear it down and build an expansion to Grady.

 

[maxxor]

Grady is leased to a not for profit for 40 years which was given around 250 million following almost closing. Northside Hospital and Wellstar’s Kennestone/Cobb/Douglas/Paulding hospitals are all leased to not for profit hospital systems by public authorities as well.

Northside is interesting because the Fulton hospital authority created the nonprofit Northside Inc to run the hospital in 1991.

There was a recentish GA supreme court case about whether some of Northside finances are subject to public records laws due to the peculiar circumstances over that entity’s creation.

I do not know the history of the Wellstar leased hospitals.

 

[wholeheartedly]

Not a hospital, but PE poisons everything it touches.

When Private Equity Takes Over a Nursing Home

After an investment firm bought St. Joseph’s Home for the Aged, in Richmond, Virginia, the company reduced staff, removed amenities, and set the stage for a deadly outbreak of COVID-19.

www.newyorker.com

 

[Mount Asclepius]

You can see their filings here if you want to see just how much their admin is bringing home.

Wellstar Atlanta Medical Center Inc - Nonprofit Explorer - ProPublica

Since 2013, the IRS has released data culled from millions of nonprofit tax filings. Use this database to find organizations and see details like their executive compensation, revenue and expenses, as well as download tax filings going back as far as 2001.

projects.propublica.org

According to the summary, in 2020 their net income was roughly negative $44M, they lost ~$54M in investments, and payed ~$1.7M in executive compensation (almost half of precious year). While I agree completely with admin costs driving wasted health care spending in the US, isn’t this a different issue?

 

[BoardingDoc]

Not a hospital, but PE poisons everything it touches.

When Private Equity Takes Over a Nursing Home

After an investment firm bought St. Joseph’s Home for the Aged, in Richmond, Virginia, the company reduced staff, removed amenities, and set the stage for a deadly outbreak of COVID-19.

www.newyorker.com

Completely agree with PE destroying medicine. I'm sure it destroyed this nursing home as well. That said, this article made some questionable (in my opinion) choices. It gives several smaller examples of cost cutting measures and issues that the residents experienced. Their highlight case then presents a verbose depiction of a resident who was doing very well prior to the PE takeover and afterwards slowly dwindled. Ultimately, the resident was given 2mg of oral morpine x2 at some point and then passed away 48 hours later.

They portray this as a clear breach of duty to properly care for this patient and as an utterly preventable event.

The patient's age? ....... 104.

Personally, I'd have gone with a different example.

 

[Arcan57]

According to the summary, in 2020 their net income was roughly negative $44M, they lost ~$54M in investments, and payed ~$1.7M in executive compensation (almost half of precious year). While I agree completely with admin costs driving wasted health care spending in the US, isn’t this a different issue?

AMC closing is some mix of:

1) An increasingly capitalistic mission of healthcare- rather than have profitable hospitals feeding a money loser doing necessary work, close the hospital that isn't profitable. Likely accelerated by the revolving door of large corporatie acquisitions where any given hospital is an asset in a portfolio rather than the foundation of a community.

2) Hospitals following affluent patients to the suburbs combined with AMC's lack of a signature service line. Taking care of medical patients is a money loser for most hospitals, and the sweet spot monetarily for trauma is being a Level 2. This is going to be a disaster for the other downtown-ish ERs as Grady is already constantly overwhelmed and Emory Midtown was dealing with 12+ hour waits even prior to this. My system relied on AMC a destination for multiple services lines for which we don't have consistent (or any) coverage. We don't have a helipad and the Emory system can take days to assign a bed after physician acceptance so I guess I'll be figuring out the nuances of fixed wing transport this winter.

 

[peanutbutternjelly]

I was offered a position at AMC earlier this year (in another specialty, not EM). I declined, for many reasons, and am now very glad that I did.

 

[HemeOncHopeful19]

According to the summary, in 2020 their net income was roughly negative $44M, they lost ~$54M in investments, and payed ~$1.7M in executive compensation (almost half of precious year). While I agree completely with admin costs driving wasted health care spending in the US, isn’t this a different issue?

You have to click on the actual 990 form. A lot of their executives probably don’t get their paycheck directly from the hospital but are employees of Wellstar corporate (or something similar) similar to how a doctor may technically be employed by “Best Medical Center Physician Group” and not directly by BMS. Their income is reported in a separate column on the 990.

I do agree it’s a multi factorial issue, every large hospital in America probably has dozens of admin making more than all but the neurosurgeons and most make plenty of money. I just think it’s important for people in our field to be able to search and find these forms when they’re publicly available.

 

[CoolDoc1729]

Not really. Most of their top tier execs have salaries listed at $0. They are clearly being compensated via some other mechanism which is not disclosed here.

It also lists $54M in “investment loss”. Is that like … they had $250M in the market and lost 20% or does that mean something else?

 

[CoolDoc1729]

Completely agree with PE destroying medicine. I'm sure it destroyed this nursing home as well. That said, this article made some questionable (in my opinion) choices. It gives several smaller examples of cost cutting measures and issues that the residents experienced. Their highlight case then presents a verbose depiction of a resident who was doing very well prior to the PE takeover and afterwards slowly dwindled. Ultimately, the resident was given 2mg of oral morpine x2 at some point and then passed away 48 hours later.

They portray this as a clear breach of duty to properly care for this patient and as an utterly preventable event.

The patient's age? ....... 104.

Personally, I'd have gone with a different example.

A retired pharmacist who thinks the reason the 104yo died was 4mg of po morphine … hmm

Unfortunately if people want their loved ones to be treated like family some may need to step up to the plate and at least help take care of their loved ones. You can’t expect someone making $17 an hour to care more than you do about your mother. I think there is going to be a real reset of care standards with the staff shortages and the increasing elderly population.
Not that it is ok for a facility to intentionally understaff, and agree that PE is generally evil and doesn’t care. But I see so so many (usually boomers) who think they should be able to relax and go camping or make pottery while someone else takes impeccable care of their parents , the math won’t work, there aren’t enough of workers for the number of old people.
In my opinion the silver lining of covid is that, since visiting the nursing homes was restricted, I don’t have to spend every holiday explaining why 102yo granny isn’t as alert as she was when you visited for the last holiday 8 months ago.
Urghhh.

 

[Mount Asclepius]

You have to click on the actual 990 form. A lot of their executives probably don’t get their paycheck directly from the hospital but are employees of Wellstar corporate (or something similar) similar to how a doctor may technically be employed by “Best Medical Center Physician Group” and not directly by BMS. Their income is reported in a separate column on the 990.

I do agree it’s a multi factorial issue, every large hospital in America probably has dozens of admin making more than all but the neurosurgeons and most make plenty of money. I just think it’s important for people in our field to be able to search and find these forms when they’re publicly available.

Agree, helpful if information publically available.

My primary point was that I doubt this hospital is closing based upon their executive admin costs. Lots of hospitals have inflated admin expenses and are quite profitable.

Without any direct knowledge, I’d speculate their closing is multifactorial related to a combination of poor payer mix, an allocation of inpatient services that doesn’t include more profitable service lines, staffing challenges/expenses from the pandemic, and investment losses

 

[maxxor]

Took me a bit to find the GA mandated hospital financial disclosures as it was not obvious from the Wellstar website how to get to them.

They are here

Wellstar Hospital Transparency Information

This information is posted pursuant to O.C.G.A. § 31-7-22 and the Georgia Department of Community Health’s Rules and Regulations for Hospital Transparency, Chapter 111-8-41.

Wellstar.org

You can see that in the most recent filing, they lost 20.26 million and then claimed 20.448 million in losses from impairment in long lived assets, yielding 41 million loss for 2021. 2020 was even worse where 53 million loss was classified as impairment of long lived assets.

I’m leaning to believing that the physical plant is too old to service and the revenue coming in isn’t enough to make the investment worth it.

 

[Dred Pirate]

yup - in our department in 05 we had one director, 2 managers, and a supervisor. Now we have 1 director, 3 assistant directors, 5 managers, and 5 supervisors.

 

[EctopicFetus]

Honestly, this is the price we pay for the system we have. Why would a company, even a non profit operate at a loss? The government of Georgia or Atlanta can buy this and run it at a loss for its citizens. Any non profit or for profit isn’t required to take losses.

To my dismay over my 10+ years I have learned that while a hospital may be non profit, or university they care nothing about anything but profit.

If I’m wellstar why lose $100m and have the pressure to find that $100m elsewhere in my operations. I can just shut it down and boom $100m saved.

Governments are there for this issue.

 

[Arcan57]

Took me a bit to find the GA mandated hospital financial disclosures as it was not obvious from the Wellstar website how to get to them.

They are here

Wellstar Hospital Transparency Information

This information is posted pursuant to O.C.G.A. § 31-7-22 and the Georgia Department of Community Health’s Rules and Regulations for Hospital Transparency, Chapter 111-8-41.

Wellstar.org

You can see that in the most recent filing, they lost 20.26 million and then claimed 20.448 million in losses from impairment in long lived assets, yielding 41 million loss for 2021. 2020 was even worse where 53 million loss was classified as impairment of long lived assets.

I’m leaning to believing that the physical plant is too old to service and the revenue coming in isn’t enough to make the investment worth it.

Or they deferred needed maintenance making prior years look artificially good, then got to use the resulting depreciation to justify closing down a vital community resource and shifting those resources to more profitable endeavors.

What I want to know is were non-profits always playing the same game as the for-profits, or did this happen in the last 10-20yrs?

 

[maxxor]

Or they deferred needed maintenance making prior years look artificially good, then got to use the resulting depreciation to justify closing down a vital community resource and shifting those resources to more profitable endeavors.

My personal experience is that tenet is the worst of the hospital chains. It may have been that tenet ran the place into the ground and dumped it on Wellstar as part of the package deal in 2016. Maybe cuz they are the only one crazy enough to buy these safety-net type places.

I’m curious if I can find the Georgia attorney general review of the transaction agreement. Usually there’s some rules about how long the acquiring entity must continue to operate the hospital as a hospital.

Regarding the second part, at least in Georgia, the laws changed in the 1980s to allow these nonprofits to form. Prior to about 1985, counties would form hospital authorities which would run the hospitals.

After that, the concept of the hospital authority leasing the premises to some management organization for 40 years started to be a thing. Some leased to existing organizations, or others created organizations to run the hospitals (dekalb regional health system, northside inc, the 5 hospitals that merged to form northwest Georgia health system and eventually renamed themselves wellstar). Grady, if anything, was late to the privatization game.

Some hospitals have always been independent / private / separate from the state (Piedmont, St Joe’s of Atlanta, Emory prior to buying DRHS).

My guess is the counterbalancing force of government run hospitals have removed a moderating influence and allowed these “nonprofit*” organizations to run wild.

 

[southerndoc]

Projected Fulton County budget deficit could impact Grady Memorial Hospital

Officials are already worried about how Grady Memorial Hospital will be impact by Atlanta Medical Center's closure, but now a $103 million budget deficit is bringing new concerns about how the Atlanta hospital will be funded going into next year.

www.fox5atlanta.com

Fulton County also announced yesterday that it will make a one-time $11 million payment to Grady to offset labor costs after Atlanta Medical Center announced it would be closing this fall.

Grady's funding is in jeopardy for 2023.

 

[VA Hopeful Dr]

Projected Fulton County budget deficit could impact Grady Memorial Hospital

Officials are already worried about how Grady Memorial Hospital will be impact by Atlanta Medical Center's closure, but now a $103 million budget deficit is bringing new concerns about how the Atlanta hospital will be funded going into next year.

www.fox5atlanta.com

Fulton County also announced yesterday that it will make a one-time $11 million payment to Grady to offset labor costs after Atlanta Medical Center announced it would be closing this fall.

Grady's funding is in jeopardy for 2023.

$11 million for a hospital that size is peanuts

 

[Arcan57]

$11 million for a hospital that size is peanuts

Although Grady is financially solvent in the same way Mr. Burns is healthy.

 

[Brigade4Radiant]

Well EMTLA is an unfunded mandate. Unprofitable hospitals will eventually close down plus it’s a lot of liability as well

 

[southerndoc]

$11 million for a hospital that size is peanuts

They receive $60 million per year from Fulton County and $20 million per year from DeKalb County. The $11 million is a bonus to Grady much like they had a similar payment in 2011 to cover their payroll when they almost closed their doors.

The AJC was quoted saying they have received $2.5 billion since 1975.

Worries about Grady hospital follow news of Wellstar Atlanta Medical Center closure

A week after learning Atlanta Medical Center will close, a whiff of anxiety about the viability of Atlanta’s sole remaining full-service trauma center, Grady hospital, caused concern among government officials this week.

www.ajc.com