Ivy Creek Healthcare announced Tuesday it was closing a Butler County hospital but said its Elmore and Tallapoosa county facilities will remain open.
Ivy Creek said it was closing the Georgiana Medical Center effective March 31. The closure is part of a realignment of healthcare services driven by the current difficult financial environment faced by rural healthcare providers.
“Our facilities here will be stronger because of the move,” Ivy Creek CEO Mike Bruce said. “We are closing a hospital that was losing money. It was causing a burden on the system and we will be better in the end. It is a stronger position for us.”
The Georgiana Medical Center was one of two hospitals in Butler County with LV Stabler in Greenville being the other, but Ivy Creek is not abandoning Butler County.
“We are gaining the home health there,” Bruce said. “It will better in the long run.”
Bruce said Medicaid reimbursements and ability to recruit medical providers made things difficult in Butler County but help Ivy Creek operations in Elmore and Tallapoosa counties.
“There was little to use for recruitment of physicians there,” Bruce said. “Here, we have Lake Martin right in the middle. It is a huge recruitment tool to get doctors to look at rural healthcare here.”
“The rising costs of healthcare coupled with the cuts in reimbursement have made it impractical to maintain financial viability with two hospitals operating in Butler County,” Bruce said in a release. “The partnering of the two organizations is the optimal way to continue to provide overall high quality healthcare for the residents of Butler County, as well as the surrounding areas.”
Ivy Creek and LV Stabler, which had operated competing home health businesses, will combine operations to provide more efficient and effective care for their patients. Ivy Creek will manage the combined home health agency. The creation of this new home health organization, named Ivy Creek of Butler Home Health, will take effect over the next 90 days with no significant changes.
“Small hospitals, in particular those in Alabama’s underserved rural counties, are under tremendous financial pressure,” LV Stabler interim CEO Connie Nicholas said in a release. “We’ve seen other hospitals across the state forced to close their doors. Together with Ivy Creek, we see this realignment as a means for maintaining healthcare options here at home and providing for the needs of our citizens who depend upon us.”
According to Alabama Hospitals Association policy director Danne Howard, about 88 percent of the state’s rural hospitals are operating “in the red” and are not currently receiving reimbursements that can cover the cost of delivering care.
U.S. Sen. Doug Jones (D-AL) says this is another wake-up call to do something about Medicaid in Alabama and the nation.
“For years, our rural hospitals have been warning public officials about the financial cliff they faced in large part as a result of unfair Medicare reimbursement rates and the refusal to expand Medicaid in Alabama,” Jones said in a release. “Thirteen hospitals have closed in our state since 2011. Seven of those have been in rural areas. How many more rural healthcare providers need to close for meaningful action to be taken? This should be a wake-up call actually, another wake-up call. We all have a responsibility to take action to expand Medicaid, to fight for wage index reform, to find opportunities to lower the cost of healthcare and to find common ground to best serve our communities.”
Jones has also called for reforms to the Medicare Wage Index, under which Alabama currently has the lowest reimbursement rate of any state in the nation. Alabama hospitals are reimbursed for their labor at a rate that is just 67 percent of the national average, while some states, such as California, get well over 100 percent of the national average.
Ivy Creek will still own and operate the Elmore Community Hospital, the Lake Martin Community Hospital, urgent cares in Wetumpka, Chilton, Enterprise and Tallassee, the Wellness Center at Lake Martin, the Lake Martin Pharmacy, the Wetumpka Pharmacy, hospices out of Dadeville and Wetumpka serving several counties, Ivy Creek Home Health, Lake Martin Home Health, Reliable Home Health Carlile Pediatrics, Ivy Creek Clinic, Lake Martin Family Medicine, Lake Martin Pediatrics, Prattville Primary Care, River Region Family Medicine, Wetumpka Pediatrics, Ivy Creek Family Care of Millbrook, Ivy Creek Family Care of Holtville, Chronic Care, Ivy Creek Occupational Medicine and respite resorts and sleep disorders center at Lake Martin Community Hospital and Elmore Community Hospital.