Singing River hospital is not on the brink of financial collapse. So why is it seeking a buyer?

Editor’s notice: This story was reported and revealed in a collaboration between Mississippi In the present day and the Solar Herald. Isabelle Taft reported for Mississippi In the present day and Gautama Mehta reported for the Solar Herald.

JACKSON COUNTY – In contrast to different Mississippi hospitals, Singing River Well being System isn’t dealing with an instantaneous monetary disaster – and that’s precisely why its leaders say they should discover a purchaser. 

The roughly 700-bed system, based mostly in Jackson County on the Coast, got here by the COVID-19 pandemic in respectable form, with income up in 2021. However the long-term forces buffeting Singing River and small hospitals across the nation imply the longer term remains to be darkish. 

Prices are rising, particularly for nursing employees. The hospital system must make enhancements to services and gear after years of underspending. Singing River has virtually no leverage to extend funds from the state’s dominant industrial insurer, Blue Cross and Blue Protect of Mississippi. And partially as a result of Mississippi has refused to increase Medicaid, a big variety of the system’s sufferers haven’t any insurance coverage, which means Singing River doesn’t receives a commission for his or her care. 

Hospital leaders say they want a much bigger chain to take over to allow them to profit from economies of scale and higher negotiating energy with suppliers and insurers. In the event that they wait till a disaster level, they’ll have much less leverage and presumably fewer patrons. 

“We’re coming at it now at a spot of power,” CEO Tiffany Murdock advised a group group within the city of Hurley in August. “And in 5 years, I can’t promise you an identical factor.”

It’s the most recent demonstration of a pattern with probably troubling penalties for sufferers: On this planet of American hospitals, solely the massive survive. 

From 2005 to 2017, the share of hospitals across the nation which can be half of a bigger system rose from 53% to 66%. 

In Mississippi, a 2017 merger made Baptist Memorial Well being Care the most important hospital system within the state. The College of Mississippi Medical Heart has expanded its footprint to Grenada, Holmes County, and the Gulf Coast and is bidding to lease hospitals within the Mississippi Delta. Rush Well being Programs, which owns seven hospitals in east Mississippi and west Alabama, this 12 months merged with Ochsner, the Louisiana-based system Singing River leaders see as their doubtless purchaser. In 2019, Franciscan Missionaries of Our Girl, additionally based mostly in Louisiana, acquired St. Dominic Memorial Hospital in Jackson.

State and domestically owned hospitals like Singing River are a fading mannequin. The American Hospital Affiliation stories that, of the nation’s 6,100 hospitals, about 950 are owned by native governments, down from 1,130 in 2008. 

The potential draw back of spending years attempting to combat large financial forces – and ending up in a a lot weaker negotiating place with a possible purchaser – is evident sufficient in Mississippi. Hospitals like Greenwood Leflore are struggling to remain afloat lengthy sufficient to discover a savior or be compelled to shut their doorways. 

A rising physique of analysis reveals hospital consolidation often will increase prices for customers by decreasing competitors. And regardless of hospital leaders’ claims concerning the useful resource advantages of becoming a member of a bigger chain, analysis additionally suggests it doesn’t enhance outcomes for sufferers. 

“We all know that consolidation goes to extend costs and probably lower entry to care,” stated Christopher Whaley, a well being economist at RAND Company. “But when the choice is that the hospital or doctor group goes out of enterprise and exits the market totally, then perhaps that’s a tradeoff we’ve to make.”

Whereas small hospitals like Singing River search for patrons, larger gamers like Ochsner – one of many greatest hospital programs within the Gulf South – have been on the lookout for new acquisitions. 

In 2020, Ochsner and Singing River introduced a strategic partnership, and Singing River acquired Backyard Park Medical Heart in Harrison County, rebranding it as Singing River Gulfport. Throughout Hurricane Ida, the partnership allowed Ochsner sufferers in hard-hit southeast Louisiana to maneuver to the Gulfport hospital. 

Corwin Harper, Ochsner CEO for Northshore and the Mississippi Gulf Coast, stated increasing into Mississippi is smart partially as a result of so many Mississippians already use Louisiana well being care services, and the states face related points with workforce recruitment. 

“With Ochsner being the most important well being system in Louisiana, it’s virtually a pure migration for folks to entry the sources that Ochsner has,” he stated. 

Murdock, a registered nurse whose profession in hospital administration has included stops in California and Oregon, was named the administrator of Singing River Gulfport. When former CEO Lee Bond stepped down earlier this 12 months, Murdock was named interim CEO of the well being system after which CEO. She is the primary lady to carry the place.

In June, the hospital trustees voted to pursue a sale to a “like-minded hospital group,” although Ochsner is mostly the one title that comes up in Jackson County. 

A report by the agency Raymond James discovered that whereas the hospital’s income had rebounded in 2021, rising bills had reduce margins. The hospital sees a excessive price of uninsured sufferers, and federal funds to look after them are dropping. And as a small system, it has little alternative to entry loans or to extend money move by negotiating with insurers, since most of its sufferers are on Medicaid or Medicare and the industrial market is dominated by Blue Cross. 

“It’s a nationwide situation,” Ryan Kelly, govt director of the Mississippi Rural Well being Affiliation, stated of hospitals’ monetary struggles. “However it’s particularly essential right here as a result of we’re a extra poor state. Our hospitals are within the purple, like on the verge of closure in a important state, and it’s not as a result of our hospitals are doing something mistaken or there’s something mistaken with Mississippi. It’s simply because we’re a poor state and we’ve much less cash to go round.”

The pandemic additionally highlighted the advantages of scale. 

“We have been spending, you realize, a nickel on a surgical masks 5 years in the past when through the top of COVID, we’re spending $5 a masks and shopping for hundreds of masks,” Murdock stated on the group assembly in Hurley.

Ochsner, against this, constructed its personal plant to make private protecting gear in Lafayette. 

However scale can include a lack of native autonomy.

Ochsner additionally has a lease settlement with Hancock Medical Heart on the Coast. In Could, Ochsner closed the labor and supply unit on the hospital, citing the low variety of deliveries that made it onerous to function the unit safely. That left the county and not using a single labor and supply unit and pissed off some Hancock County residents and leaders. 

Over the summer time, a Singing River retiree named Irby Tillman appeared poised to derail hospital executives’ plans. 

Below Mississippi regulation, anybody can pressure a referendum on a public hospital sale by acquiring a petition with at the least 1,500 signatures. Tillman, who labored as a carpenter on the hospital, was at one of many board of supervisors conferences the place the sale was mentioned. He heard an legal professional say that the supervisors would make the choice – except somebody compelled a referendum.

“I occurred to be standing there and I stated, ‘Nicely, I’ll take that problem,’” he stated. “I don’t suppose 5 males ought to have that huge choice.”

However even when Tillman had by no means launched his petition drive, pursuing the sale would have required Singing River executives to embark on a type of political marketing campaign to steer not solely supervisors but additionally their constituents to assist the sale. 

The hospital is the second-largest employer in Jackson County with greater than 3,500 staff. Individuals all around the county keep in mind births and deaths, emergencies and routine check-ups, first jobs and decades-long careers at Singing River. 

A lot of them additionally keep in mind a profound betrayal: For years, the hospital secretly stopped paying into retirees’ pension fund earlier than it collapsed in 2014. A settlement in a federal class-action lawsuit resulted in decrease funds than retirees had been promised. 

Murdock launched into a county-wide talking tour late this summer time. She spoke at college district convocations and rotary membership conferences, the chamber of commerce and church buildings, attempting to persuade folks to assist the sale. 

At a particular assembly for pensioners, Murdock assured them the sale wouldn’t have an effect on the pension settlement. 

In the meantime, Tillman traveled the county, too. In late August, he and his cousin Paul Sensible, additionally 73 and a Singing River retiree, spent a number of hours outdoors Ixtapa, a Mexican restaurant in Vancleave. They each grew up in Pascagoula, two of their grandmother’s 75 grandchildren. Sensible was leaning towards supporting the sale, whereas Tillman was leaning towards it. 

Tillman prided himself on by no means saying a phrase about how he thought anybody ought to vote, solely emphasizing the significance of getting a say within the course of. The lads carried a hand-crafted poster that stated “Let your voice be heard” and was adorned with small American flags. Everybody they talked to needed to see a referendum. 

All 5 supervisors and even Murdock signed the petition.

“If I didn’t signal, I didn’t need (that) to get in the best way of the aim, which is to maneuver this ahead,” she stated. “And so I didn’t need that to be the headline. I needed the headline to be like, ‘That is the best factor to do, whether or not there’s a petition or not.’”

However she was cautious of what a referendum may imply.

Mississippi In the present day may find just one such referendum in state historical past. Oktibbeha County voters roundly rejected a proposal to promote OCH Regional Medical Heart in 2017. If that occurred in Jackson County, Singing River leaders stated the county must increase taxes and nonetheless be unable to cowl rising prices. 

Ultimately, Tillman didn’t collect sufficient signatures to require a referendum. It rained closely within the weeks earlier than the deadline to show within the petition, and Tillman relied on quaint strategies to acquire signatures.

“Water and ink don’t go collectively too good,” he stated. 

And after months of dialogue, exhibiting as much as board of supervisors conferences and public hearings, he was leaning towards supporting the sale anyway, he stated. 

The Jackson County Board of Supervisors doesn’t but have a particular timeline for when the request for proposals will probably be finalized and patrons can start submitting bids. 

The potential purchaser continuously talked about by title in Jackson County is Ochsner. However different hospital chains may make a transfer, too. 

The Franciscan Missionaries of Our Girl Well being System (FMOLHS), which operates St. Dominic Memorial Hospital in Jackson and hospitals in Louisiana, stated in an announcement that it’s “conscious” that an RFP has been issued. 

“FMOLHS commonly evaluates alternatives to increase entry to care by partnering with high quality well being programs to carry collectively excellent clinicians, essentially the most superior know-how and main analysis to make sure that our sufferers obtain the best high quality and most secure care doable,” stated Kevin Cook dinner, chief working officer.

The sale will go away Mississippi with one much less domestically owned hospital, and it might be a sign of the longer term dealing with each small hospital within the state. 

Richard Roberson, common counsel and vice chairman of coverage on the Mississippi Hospital Affiliation, stated Singing River’s scenario highlights the structural forces working towards Mississippi hospitals. 

“I believe that’s what’s scary about it – you do see a hospital that could be a robust hospital, a robust well being system, and nearly as good as they do issues, they’re nonetheless struggling,” Roberson stated.