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Budget problems plague Commerce’s hospital

BJC plans job cuts in an effort to survive

POSTED: January 23, 2009 12:04 a.m.

The future of Banks-Jackson-Commerce Medical Center remains uncertain, as the 90-bed Commerce hospital has faced one setback after another.

Last week, Chief Executive Officer Jim Yarborough announced that BJC would have to cut about 45 jobs because its revenues have not kept up with expenses.

Prior to the job cuts, BJC had about 400 employees, about 320 of whom were full time. Each of the hospital’s departments was asked to slash its budget by 20 percent.

Yarborough blamed the budget shortfall on inadequate compensation from Medicare and Medicaid, as well as $1.3 million spent on charity care and more than $5 million in bad debt from uninsured patients who couldn’t pay their bills.

At the same time, the slow economy has resulted in fewer patients seeking the types of services that can earn money for a hospital.

On Dec. 9, BJC closed its maternity ward. The hospital, at 70 Medical Center Drive, had only been delivering one or two babies a week, not enough volume to pay the eight full-time employees who worked in labor and delivery.

At the time, hospital spokesman Henry Slocum said too many of the maternity patients were on Medicaid, which doesn’t reimburse as much as private insurance.

Another problem: BJC only had three physicians who admitted maternity patients to the hospital, and only one of those was an obstetrician; the other two were general practitioners.

The lack of doctors who can admit patients has been an ongoing issue at BJC, according to Commerce Mayor Charles Hardy.

"They lost a surgeon who had been doing a lot of operations, which brings in a lot of revenue," he said. "He resigned about six months ago, and that’s about the time the financial situation started getting really bad."

Upgrading the facilities might attract more doctors, but it’s not feasible.

"The current hospital was built in the early 1960s, and they just can’t remodel it anymore," Hardy said.

He called it a "vicious cycle," noting that without doctors, the hospital can’t survive, but without a better hospital, doctors might not want to practice there.

Two years ago, BJC attempted to build a new hospital on about 22 acres of donated land off U.S. 441. Estimating that the project would cost about $35 million, the BJC hospital authority approached the Jackson and Banks governments, asking them to issue revenue bonds to fund construction. The boards of commissioners for both counties refused the request.

"They wanted us to make it a SPLOST project, but the county had other priorities," said John Hulsey, Jackson’s finance director. "We’re like every local government in Georgia; there are many demands on our SPLOST dollars."

Hulsey said BJC already owes $1.76 million on a revenue anticipation certificate.

"We transfer money to retire 75 percent of the principal on their debt, and Banks pays the other 25 percent," he said.

Late last year, it seemed as though BJC might have found an answer to its problems. Atlanta-based Doctors Hospital of Georgia offered to buy BJC and build a new facility at a medical complex it was developing in Commerce.

But with debt soaring and revenues crashing, BJC began to look like a bad investment, and Doctors Hospital pulled out of the deal earlier this month. Shortly after that, BJC’s chief financial officer resigned.

Hospital officials, however, are doing what they can to keep BJC afloat. Yarborough said they have started asking patients for at least partial payment up front, which has helped boost cash flow.

They also are "aggressively" recruiting a general surgeon and an internal medicine physician for the hospital staff. And they want to start a walk-in clinic to divert inappropriate patients from the emergency room, where care is very expensive.

Still, residents of Jackson and Banks counties are wondering whether BJC can survive.

"We’re very concerned about it," Hardy said. "They’re the largest industry around here, and they’re one of the city’s largest utility customers."

Hunter Bicknell, chairman of the Jackson County Board of Commissioners, said he’s worried about layoffs.

"Certainly we’re concerned about any potential loss of employment," he said. "(BJC) has both direct and indirect economic impacts. Also, we need a medical provider in the county. Heaven forbid it should close."

Hardy said if BJC were to shut its doors, Commerce residents would have to go to hospitals in Athens, 18 miles away, or Gainesville, 30 miles away.

"But we would definitely hate to see the hospital close," he said. "It means so much to our community. The care has been very good, and the doctors and staff are excellent."



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