A couple of weeks ago, Parkridge announced that Parkridge West, the former Grandview Medical Center in Marion County, would soon cease inpatient services. In this case, Parkridge made a business decision based on inpatient utilization even though millions of dollars have been spent on upgrades in the last year. Parkridge announced that outpatient services will still be offered. In Georgia, a number of rural hospitals have ceased operations under similar circumstances, although a few have re-opened as emergency centers only. Then, there is Hutcheson Medical Center.
It is no secret that Hutcheson has been struggling financially for years. Fingers have been pointed at a former CEO, the competency of the various Hutcheson boards have been questioned and the roles of North Georgia politicians has been lamented. In 2011, Hutcheson entered into a shotgun wedding with Erlanger Medical Center but two years later, the two parties entered into a nasty divorce which continues to this day. There have been hearings in federal court and accusations flung every which way. The latest of these is by Hutcheson which claims a well respected Chattanooga attorney who assisted in the intitial negotiations being accused of unethical conduct. At the end of the day, a North Georgia taxpayer like me has to wonder if it's time to shut the doors on this soap opera called Hutcheson Medical Center?
For the last fiscal year, according to published reports, Hutcheson lost $6.1 million. In the first few months of the new fiscal year, a half million dollars has been lost. This is after Erlanger pumped over $20 million into Hutcheson to keep it open. Additionally, Walker and Catoosa County governments borrowed millions more to keep Hutcheson going. Catoosa County recently paid their part of a Hutcheson loan back to Regions Bank in the amount of $4.5 million out of county reserves. Walker County recently borrowed $10 million from a sub-prime lender to pay back its part of the load to Regions and keep government operations going. Hutcheson has acknowledged that its regular inpatient census is only 15-20 percent of its total beds. At the end of last year, Hutcheson decided to go the bankruptcy route. And recently, Catoosa County hired a former CEO as a consultant to determine if Hutcheson's assets should be liquidated. Hutcheson's total debts are over $80 million. Its assets at best are a third of that amount. Therefore, I believe Hutcheson should close.
It's not easy to advocate the closing of Hutcheson and the termination of hundreds of jobs that North Georgia families need but I see no way that Hutcheson can remain afloat. First, most residents in North Georgia do not utilize Hutcheson as their primary hosptial. Chattanooga hospitals aren't that far and frankly, the best facilities and specialists are in Chattanooga. Second, a physician friend recently pointed out that Hutcheson management over the years has run off most of the family doctors who sent their patients to Hutcheson. Many of these family doctors are now affiliated with Chattanooga hospitals. Without these family doctors, Hutcheson does not have a mechanism to build a patient base. Third, without a solid patient base to generate revenue, there is no way Hutcheson can ever make a dent in its debt.
A North Georgia political leader recently told me that all decisions made regarding Hutcheson in the last few years have been political. I believe he is correct. A few years ago, a major hospital company wanted to buy Hutcheson and pay a very good price for it. Political leaders and the various Hutcheson boards thought it best to keep Hutcheson's ownership local. They were wrong. The decision to enter bankruptcy was political - I believe it was a strategic move to try to keep Erlanger from collecting on the $20 million in loans that Walker and Catoosa Counties are on the hook for. In Walker County's case, it recently borrowed from a sub-prime lender to pay a loan it backed for Hutcheson because last year, national bond rating agencies lowered Walker County's bonds to BBB- just above junk, because of Walker County's exposure to Hutcheson's debt.
At the end of the day, it's time to stop the bleeding - the bleeding of North Georgia taxpayers by closing Hutcheson. At first, this may be painful but in the long run, it is the best business decision that can be made. If Hutcheson were any other commercial enterprise that was failing, it would have been closed a long time ago.
Mike Cameron