Health care is ailing in many parts of rural Alabama, as the combination of rising operational costs, dwindling local populations and increasing government regulations makes it difficult for some hospitals to remain open. The University of Alabama at Birmingham is attempting to help with the administrative equivalent of a house call.
In late 2017 and early 2018, the UAB Health System entered into management agreements with three rural hospitals in the state: Bryan W. Whitfield Memorial Hospital in Demopolis; LV Stabler Memorial Hospital in Greenville, and John Paul Jones Hospital in Camden. Through these affiliations, UAB comes in and assists with the overall facility operations, including having two members on each hospital board.
“They help with everything,” Greenville Mayor Dexter McLendon says. “They don’t go in there and manage day-to-day. But they give advice and meet with you on a regular basis with suggestions and recommendations. They set up goals and plans for the board to follow to get us where we need to be.”
That’s important, because many rural hospitals in the state currently are far from where they need to be. “The challenges of a rural hospital in Alabama are so numerous that I probably couldn’t list them all,” McLendon says.
The main issue is financial. Alabama is one of 14 states that has refused to accept Medicaid expansion under the Affordable Care and Patient Protection Act, a move that would have decreased the number of uninsured residents in the state.
Yet the uninsured still receive treatment when they are seriously ill or injured, and those bills often go unpaid. That can be a major problem for rural hospitals, which usually serve a higher percentage of uninsured patients and have a lower financial cushion to absorb those costs.
“When (Alabama) declined to take the Medicaid money, it just destroyed our hospital,” McLendon says. “It made absolutely no sense.”
Other factors include the increasing difficulty of finding young doctors willing to live in rural areas, and the escalating complexity of the overall health care system. Hospitals have to report to dozens of regulatory bodies and handle layers upon layers of documentation.
“Health care has become so complex that there’s no way a small hospital can have the expertise to navigate everything,” Whitfield Memorial CEO Douglas Brewer says.
That is where the UAB Health System is trying to help. Through these management agreements, UAB provides access to its wide array of operational personnel for advice and reduces some costs by allowing the hospitals to purchase equipment through UAB’s supply contracts.
“I have the greatest respect for these rural hospital administrators, because I have hundreds of people who I can pick up the phone and ask them to do something for me, and rural hospitals don’t have that,” UAB Health System CEO Dr. William Ferniany says.
“We have such rich resources here. I have an insurance department, a compliance department, a supply-chain department, a strategic-planning department. They can provide help to these rural hospitals that don’t have all these services.”
This includes assistance with insurance, capital, IT issues and doctor recruitment. UAB analyzes data and conducts community-needs assessments to discover the best areas of focus for each hospital. And perhaps most importantly, UAB simply provides guidance to hospital officials who have been unable to keep up with the rapid change in health care over the past decade.
“A lot of it is strategic, business and operational things. But we also give them somebody to partner with and support them,” says Don Lilly, senior vice president for network development in the UAB Health System. “They’re out there on this island with health care moving so fast around them with all these changes going on. Who do they have to lean on?”
For UAB, these agreements are partly altruistic and partly self-serving. Lilly says the university sincerely wants to improve health care throughout the state. But it also helps UAB if its hospital, which constantly is at or near patient capacity, handles only the more serious cases and doesn’t become bogged down with ailments that could be easily treated at a smaller, rural facility.
“We approach this as a mission-driven endeavor. We feel like it’s our role to care for people all over the state,” Lilly says. “So we thought it was important to work with some of these rural communities to see what we could do to help them.
“By doing that, the goal is to keep as many patients in their home community as possible. Our hospital is full to the gills. We don’t need generic heart patients from other communities. If we can help them figure out a way to take care of those patients locally, it keeps our resources open for the people who really need to be transferred here.”
Or as Ferniany says, “The more patients we can keep in other hospitals, it’s a win all around. The hospitals win because they get the revenue. The patient wins because they can stay closer to home. And we win because it leaves room for the patients who we should really be treating.”
The other winner is the rural community itself, which keeps its hospital — important not only for health care but also for the local economy and business recruitment.
“When you’re recruiting industry — and I’ve met with hundreds of companies over the years — the first two things they ask about are the schools and the hospital,” McLendon says. “It’s not easy to convince a company to come to your town if your hospital is struggling.
“It’s not like UAB can wave a magic wand and make things perfect. This doesn’t solve all the problems. But it does provide a light at the end of the tunnel.”
Lilly says since the agreements began, there have been “seven-figure improvements” in revenue at the Greenville and Demopolis hospitals, while JPJ Hospital in Camden “has been kind of static.” He says UAB receives a percentage of the “bottom line” if it helps create one for the hospital, but until then, “we’re kind of working for free.”
In this case, however, the bottom line is not necessarily the top priority. By keeping these hospitals open, it ensures that rural residents have quicker access to health care, without having to travel an hour or more to the nearest hospital.
“We recently had an 11-week-old baby brought in who was not breathing. We were able to stabilize the baby and get it to Children’s (of Alabama),” Brewer says. “If this hospital wasn’t here, there’s no question that baby would not be alive. So our link to UAB has definitely saved lives.”
Cary Estes and Robert Fouts are freelance contributors to Business Alabama. Estes is based in Birmingham and Fouts in Montgomery.