Eastern North Carolina hospitals cope with the financial realities of coronavirus - North Carolina Health News
By Liora Engel-Smith
The video shows a scene that has become unusual in the age of coronavirus crowd control measures.
It shows a small crowd. Picture a typical hospital hallway, gleaming fluorescent lights and all — lined with masked people. Some of the providers have colorful ribbons, others are clapping and cheering.
Someone wheels a masked patient in a wheelchair. The cheering intensifies. The cell phone camera is positioned too far away to see the patient’s face, but a subsequent photo shows her lifting her arms in victory. The patient, referred to in Washington Regional Medical Center’s social media only as Ms. Downing, has been hospitalized with coronavirus for 20 days. The video, posted last week, celebrated her recovery.
The week of Downing’s release from the hospital has been an eventful one for eastern North Carolina’s hospital ecosystem. Some rural hospitals in that part of the state had been experiencing difficulties even before the coronavirus pandemic. Now, it seems, the region’s health infrastructure was dealt another blow.
On the day she was celebrating her release from the small rural facility, Vidant Health, which serves more than 1.4 million people in 29 in eastern North Carolina counties, announced a series of cost-cutting measures due to economic pressures generated by COVID-19.
Later that week, Washington Regional, the hospital where Downing spent the better part of a month, had news of its own. The Plymouth facility announced it officially changed ownership, moving from bankruptcy to the hands of Texas-based firm Affinity Health Partners.
Economic strains are not unusual in the world of rural hospitals, many of which operate at thin margins or even losses, said Mark Holmes, director of UNC’s Cecil G. Sheps Center for Health Services Research. But the pressures of coronavirus, including cancelation of elective procedures, a main source of revenue, have made an already tenuous existence more challenging.
Social distancing has also prompted patients to avoid the emergency department, leading to additional, mostly unplanned, losses, he added.
Even with assistance from the federal government, which may stabilize hospitals in the short run, the prospect of a protracted coronavirus crisis could push some health systems to the brink.
“As the duration of this period could be a couple of weeks or it could be much longer, [that federal support] is not going to sustain [rural hospitals] for a long period,” he said. “And so some places will inevitably have trouble staying afloat.”
Cost-cutting at Vidant
The cuts Vidant announced last week are the latest in a series of similar moves. Last August, Vidant closed an inpatient psychiatric unit in Beaufort County, attributing the closure to Medicaid reimbursement uncertainties, among other factors. There are other signs of hardship too. The most recent Vidant Health financial statement available, for the fiscal year that ended Sept. 30, 2018, showed that three of Vidant’s rural hospitals had experienced a loss from operations, though the health system as a whole was in the black.
Then, in March, the Greenville-based health system announced it was laying off 191 employees. While most of the layoffs came from the corporate office and Vidant Medical Center in Greenville, roughly 20 of the eliminated jobs came from the system’s rural hospitals.
Last week’s announcement featured further belt-tightening, including furloughs, salary reductions to administrative staff and more. According to a statement from Vidant, coronavirus contributed to the hardship.
“Similar to health care organizations across the country undergoing challenges due to COVID-19, Vidant is experiencing a significant decrease in volumes which is impacting revenue,” the hospital system said in the April 22 statement.
In an earlier statement, spokesman Brian Wudkwych said that cost cutting measures will not affect Vidant’s ability to respond to coronavirus.
As the health system contends with these economic realities, Mike Emory, spokesman for Pitt County, where Vidant’s headquarters is located, said the system and the health care it provides is important to residents.
“Pitt County greatly values the partnership between the community and Vidant Health, with Vidant Medical Center in particular,” he said in an email. “The services provided by this organization play an integral part in the physical, economic, and societal health of not only Pitt County, but our region as a whole.”
Washington Regional emerges from bankruptcy
Almost 50 miles east of Greenville, another North Carolina facility was hoping to put turmoil of its own in the rear view mirror. The 25-bed Washington Regional Medical Center was in bankruptcy proceedings until it sold to Affinity last week. Washington Regional is Affinity’s first purchase, but a company headed by Affinity CEO Frank Avignone has been hired to manage at least one other hospital. That Oklahoma hospital closed abruptly in 2018 for lack of funds. Avignone said in the past that the closure was out of the company’s control.
Court documents show that Affinity also plans to buy a shuttered hospital in Missouri in May, which Avignone previously said he wants to turn into a medical mall.
During the bankruptcy proceedings, Washington Regional and the economically depressed community it serves endured a temporary closure of the hospital and two missed payroll payments to more than 90 employees. Avignone blamed the lapse in payroll to a holdup with Medicare billing. Affinity, which was hired to manage the hospital, intended to purchase it in the end of January for $3.5 million, but the sale was delayed.
“ … [T]hese are complicated transactions,” Avignone wrote in an email about the delay. The money needed for purchasing the facility, he added, was a large sum to raise and “toward the end the pandemic did not help.”
But the sale went through despite that financial snag, he added.
Now that the sale of Washington Regional is finalized, Avignone said repairs to the hospital’s aging facility will begin in earnest. Because of social distancing measures mandated by coronavirus, the initial repairs will focus on the hospital’s exterior, he said. When the COVID-19 crisis eases, Affinity plans to construct a new hospital building in Plymouth.
In the short term, Avignone said the hospital plans to step up its offerings, including screening for COVID-19 antibodies and offering minor procedures such as colonoscopies. Later on, the plan is to offer some elective procedures at the hospital.
Uncertainty over the hospital’s future has worried Washington County officials, who have intervened numerous times to preserve the former county hospital since its sale in 2007. Washington County Manager Curtis Potter said on Tuesday that the finalized sale was a good sign.
“Hopefully it means that, with new ownership and management, the hospital will be here for the foreseeable future,” he said.