There is consensus that Thomasville Regional Medical Center is as deserving of COVID-19 relief money from the federal government as any other hospital. But the 29-bed rural hospital in Alabama’s Black Belt has been fighting for more than a year to get its share, which amounts to $7.2 million.
While the hospital struggles to stay open, local and state leaders have visited Capitol Hill and written letters, made phone calls, held meetings and lobbied in concert with the only other two hospitals in the country that are in the same boat. U.S. Rep. Terri Sewell, who represents Alabama’s Seventh Congressional District, even flew from Washington with President Joe Biden when he visited the state in May and took the opportunity to make the case for saving the hospital.
Despite the strong support, the hospital has never received the money. Although business is improving as the pandemic wanes, Thomasville Mayor Sheldon Day says that if it weren’t for a major private donor the hospital might have had to close.
“Where do we stand today? Everybody agrees that there needs to be a fix. Everybody agrees that somehow, some way we need to come up with an answer,” Day says.
The root of the problem is this: Hospitals and other major providers of health care were slammed in 2020 by COVID-19. They took in the most serious, sometimes life-threatening cases. And the coronavirus that causes COVID-19 was so contagious that elective surgeries and routine care abruptly halted. Nationally, hospitals were left without revenue they had budgeted and expected to receive, while their intensive care units were packed with critically ill COVID-19 patients.
When Congress passed the CARES Act and associated legislation, the money was to be split among hospitals based on a formula that relied heavily on the previous year’s recorded revenue.
But three hospitals didn’t have revenue in 2019 because they had not yet opened. One is in Derby, Kansas; one in Las Cruces, New Mexico, and one right here in Thomasville.
“When you’ve got zero, you basically start with nothing,” says Day. “That’s the basic issue. We’ve raised the issue with Congress, with HHS [Health and Human Services], with the White House. There is consensus that the original formula was flawed when it came to us.”
Of the three, Thomasville is the only rural hospital. Located in Clarke County, the city of about 4,000 was originally founded as a railroad town in the late 1800s. Its location in the Alabama Black Belt means it serves one of the poorest areas of the nation. It is centrally located between Mobile and Birmingham, Tuscaloosa and Montgomery. The nearest hospital is about 35 miles away, but people needing the highest levels of acute care must travel about 100 miles to Mobile on the south or 141 miles to Birmingham on the north.
As local and state leaders have noted when writing to Washington, D.C., the population is more than 65% minority, and some 70% are eligible for Medicaid or Medicare. Not long ago, researchers at Harvard University studied life expectancy by congressional districts, determining that the 7th District of Alabama had the lowest life expectancy in the nation. The 7th, Sewell’s district, includes much of the Black Belt and parts of Birmingham.
Thomasville used to have a privately-owned hospital, the Southwest Alabama Medical Center, but it shut down in August of 2011 after failing to make payroll. The community found a way to build a new one. Day says the financial package included passage of a city sales tax to pay off a U.S. Department of Agriculture loan, tax credits, grants and donations.
One of the donations, for $3.5 million, came from Medical Properties Trust Inc. Based in Birmingham, MPT calls itself the leading source of financial capital for hospitals in the world. Day says that Edward Aldag Jr., president and CEO of MPT, wanted to honor his father-in-law, a former Clarke County commissioner, in making the donation and that Aldag’s wife grew up in Thomasville and his mother-in-law still lives there.
It was a proud moment for Thomasville when the new $40 million, 29-bed Regional Medical Center opened in March 2020. And it was just in time for the pandemic.
Among the many lessons of the pandemic has been that hospitals are part of a health care system that depends on all links in the chain, says Dr. Donald Williamson, president and CEO of the Alabama Hospital Association. Although TRMC contended with expected start-up costs and unexpected loss of revenue, it did its part in caring for COVID-19 patients and serving as a source for vaccinations.
“The only way the system during COVID stayed afloat was because rural hospitals took care of the patients they could and only transferred patients to the larger hospitals who needed to be transferred,” Williamson says. “If we did not have rural hospitals, we wouldn’t have had bed capacity at our urban hospitals, and we would have had a much more dire situation.”
Williamson has written to President Biden, saying in part: “This dire situation requires your engagement to save TRMC to ensure the most vulnerable Alabamians have access to lifesaving health care.”
It wasn’t until the federal money began coming into the other Alabama hospitals that Williamson and Day realized Thomasville had been left out. Day says he’s been to Washington at least half a dozen times since January trying to work out a solution. The Alabama congressional delegation, together with those representing Kansas and New Mexico, are working together without regard to political party.
Inside the Washington health care bureaucracy, federal officials cite different reasons for the problem and haven’t agreed on what should be done to fix it, Day says, even as they do agree that the three hospitals are not at fault and should be reimbursed.
Over the last year-and-a-half, money was placed in an appropriations bill intended to provide relief for war-torn Ukraine, then it was pulled out at the last minute. On still other occasions, federal officials have said new legislation will be needed.
Late last year, it seemed that the federal government was about to release the money, Day says. But when the check arrived in January, it was for $16,000.
Two developments are keeping TRMC afloat, Day says. First, business is improving as the pandemic wanes. “We did more surgery in April than we’ve done since the hospital has been open. We’re seeing our inpatient count go up. The business is increasing and going in the right direction.
“We’ve actually been talking with multiple new doctors that are interested in coming here, additional specialties and etc. Until we get this resolved, naturally we don’t want to sign contracts with doctors that we can’t fulfill.”
Second has been additional private fundraising. Day says he asked Aldag at Medical Properties Trust for advice on what to do. MPT donated $1 million and pledged up to an additional $1 million in matching funds for other corporate and industry donations. Gov. Kay Ivey allocated $250,000.
“People are stepping up and we’re forever grateful,” he says.
But how long can this go on? “We can hold out for a few months,” Day says. His fear is that Thomasville’s hospital may not survive if it has to wait for a new federal budget year, the next election, or a congressional standstill that results in one or more continuing resolutions to keep the government open.
“It’s like peeling away the layers of an onion. You’ve got to keep peeling until you finally get to the core of the issue. And sometimes that takes forever because you’ve got to work your way through.”
Jane Nicholes and Mike Kittrell are freelance contributors to Business Alabama. She is based in Daphne and he in Mobile.
This story originally appeared in the July 2022 issue of Business Alabama.