When tiny Tattnall County Hospital in rural southeastern Georgia closed its doors eight months ago, the prognosis for recovery was grim. Even the most optimistic local residents figured the 40-bed hospital, losing money at the rate of about $58,000 a month, was gone for good.
Then, to the surprise of almost everyone in the small town of Reidsville (population 2,400), an unlikely savior stepped in to save the ailing hospital-at least for the time being.
Jim Burnette, an Atlanta-area healthcare consultant with no experience in hospital administration, took over Tattnall from the local county governing board without paying a penny and reopened it in early October as a private, for-profit facility with about half its former staff and a new lease on life.
Hospital admissions for the first three months since reopening are running about 15% above the 1999 average. And emergency room visits are averaging 450 a month-the same as in the previous year. Meantime, labor costs have been sliced in half. Burnette, who expected to struggle through the first six months of this new venture, now expects to turn a profit by the end of this month.
"Most people will tell you that rural hospitals are doomed to failure," says Burnette, whose 4-year-old consulting firm in the south Atlanta suburb of Peachtree City focuses on resource-management systems for hospitals. "Well, I looked at this hospital, and I said, `This doesn't have to happen. We can make this work.' Of course, the jury's still out."
Despite his lack of experience in hospital management, Burnette expresses unbounded faith in the future of small, financially troubled facilities such as Tattnall that usually don't get a second chance once they close their doors.
Tattnall's fiscal struggles are emblematic of many rural hospitals in Georgia and across the nation. In the past two years, three of the four shuttered Georgia hospitals were in rural areas. With higher populations of Medicare and Medicaid patients, these rural hospitals often have less flexibility to spread their resources, says Holly Bates-Snow, vice president for government relations at the Georgia Hospital Association.
With historically thin profit margins, rural hospitals must "connect" to the local community with better marketing and promotion, Burnette says.
He says he also expects to improve the billing and collection process and to develop a sense of partnership with the nearly two dozen physicians who have privileges at the hospital. But his most dramatic immediate step was cutting staff, reducing by about half the number of full-time employees.
"The hospital had anywhere from 50 to 77 employees (in recent years), and a census of about eight inpatients," says the 52-year-old Burnette. "That cannot work. We're operating at about half the number of employees, and providing a better level of service, according to the comments we're getting."
Saddled with $3.5 million in debt, the hospital was forced to shut down when the Tattnall County Commission refused a request for a $100,000 emergency bailout. Earlier in the year, commissioners extended a $148,000 line of credit that only temporarily halted the financial bleeding at the 26-year-old hospital.
"The closing of the hospital was a long, drawn-out process," says John Cheney, executive director of the Tattnall County Development Authority. "It was like a terminally ill patient, watching it die slowly. From the standpoint of (Burnette) coming in, that was basically a prayer answered. The county government had extended itself to the point where it just couldn't do anything else to help."
During the six-month shutdown of the only hospital in Tattnall County, residents were forced to drive to adjoining counties for services, adding as much as 40 minutes to a trip to the hospital. Gene Crapse, the Tattnall County manager, calls Burnette a "white knight" whose bold business decision helped pump some vitality into a community struggling through an extended economic slump. Local business leaders felt that Tattnall County, population 19,000, a farming community whose claim to fame is being the site of the world's largest bait-cricket farm, would never attract new industry without a hospital of its own. "When a rural hospital like this disappears, you disenfranchise a lot of folks from healthcare," Crapse says. "This is very important to this community-economically as well as from a healthcare perspective."
In his deal with Tattnall County, Burnette assumed all of the facility's $3.5 million in debt-along with its estimated $2.5 million in assets. Crapse acknowledges that there was some concern among local government officials about relinquishing those assets.
"From a business point of view, there was no way for the (hospital authority) to get to that light at the end of the tunnel," he says. "The hospital was in such a state of financial mess, it had no maneuvering room. Was there some forlorn feeling about giving away these assets? Certainly there was. These were county assets; the citizens paid for them. But that hospital, essentially, was just an empty shell."
Burnette says he thinks the deal was good for his company and Tattnall County: "They were sitting there with a dilemma they couldn't solve. I came in and said, `I can solve the problem. I'll take all your debt.' They really didn't have any options. I told them that I believe, fundamentally, that both parties have to win or it's not a good deal."