Hospitals in Mississippi face unprecedented financial pressures. Now two more have been forced to seek out new owners. The City of Greenwood and Leflore County have put jointly owned Greenwood Leflore Hospital up for bid. Jackson County supervisors will hold a public hearing on August 17 after voting to consider putting county owned Singing River Health Systems (SRSH) up for bid.
The Greenwood Commonwealth reported its local hospital was already losing millions of dollars annually prior to the COVID pandemic. Finances have gotten worse since with the hospital likely to run out of cash as early as October.
“We entered the pandemic with $20 million in the bank, “hospital spokesman Gary Marchand told the newspaper. “We are currently resting at around $5 million.”
The Sun-Herald reported Singing River Health System needs a cash infusion of $287 million to cover hospital costs over the next five years. This follows a Raymond James financial analysis presented to the county that said the hospital needs to find “a strategic capital partner.”
Failure to put the hospital up for sale, supervisors said, would force them to heavily increase taxes. One estimate said county taxes would have to go up as much as 75%. Jackson County Chancery Clerk Josh Eldridge told WLOX, “If they truly need that type of support, there’s no way the county can fund it.”
Both hospitals are the second largest employers in their counties.
The Northside Sun reported that discussions have been held with the University of Mississippi Medical Center about joint operation of Greenwood Leflore Hospital. The 800 pound gorilla in the room for this scenario is the hospital’s weak cash position. Facing financial pressures itself, can UMMC take on a cash strapped hospital?
The Raymond James study reported Singing River also faces a current cash squeeze with a daily operating balance averaging half the norm – about a $17 million shortfall. The study also looked at potential sales value for the system.
The Sun-Herald reported Ochsner Medical Center in New Orleans would be interested in acquiring SRHS. Ochsner already has a strong presence along the Gulf Coast and recently completed a merger with Rush Health Systems in Meridian. At least one Mobile, AL., hospital system may be interested too.
Sales and mergers of Mississippi hospitals represent a growing trend. In addition to the Rush/Ochsner merger, others in recent years include Mississippi Baptist Health Care in Jackson merging into Baptist Memorial Health Care in Memphis and St. Dominic Health Services in Jackson being acquired by Franciscan Missionaries of Our Lady (FMOL) Health System in Baton Rouge.
One knowledgeable source said to expect additional mergers, acquisitions and even some closures as hospital finances continue to deteriorate. “All this turmoil could be avoided if state officials would agree to some form of Medicaid expansion,” he added. Another said officials should consider this a disaster and provide emergency relief.
Whatever, community controlled hospitals may soon be a relic of the past.
“The way of fools seems right to them, but the wise listen to advice” – Proverbs 12:15.
Crawford is a syndicated columnist from Jackson.