Members of the public will have a chance next month to ask questions and learn more about Northeast Georgia Health System’s pending takeover of Habersham Medical Center. A public hearing on the acquisition is scheduled for 6 p.m. on April 13. The hearing will be held in the community room at Habersham EMC in Clarkesville.
“It’s an opportunity for the public to hear certain details about the acquisition and ask questions or voice their support or concerns,” says Sean Couch, Executive Director of Communications and Consumer Strategy for Northeast Georgia Health System (NGHS).
Georgia law requires a public hearing to be held when hospitals change ownership. NGHS officials say they believe they met that requirement with a hearing in 2019 after the original option to purchase agreement was signed. However, since that agreement has been expedited, they’re holding another hearing out of “an abundance of caution.”
“We just want to take the message to the people, hear their response and answer their questions,” says Couch. “Nothing impacts opinions and builds trust like a face-to-face conversation.”
Terms of agreement
In 2019, the Habersham County Commission and Hospital Authority agreed to a five-year, $15 million deal with NGHS and the Hall County/Gainesville Hospital Authority. Under the terms of that agreement, NGHS agreed to invest $3 million annually in capital projects at Habersham Medical Center for the option to acquire the hospital and its assets at no additional cost after five years.
Any dollars HMC generated beyond 20 days of cash-on-hand to support operations were to be transferred into a fund during the five-year period. At the end of the agreement term, the Hospital Authority of Habersham County was to apply the fund balance to the hospital’s bond debt.
Habersham Medical Center President and CEO Tyler Williams says a bank account was opened to establish a debt service fund, but there is nothing in the fund to pay down the county’s bond debt.
“At this time, the account remains unfunded other than the amount required that was required to open the account. HMC has never obtained more than the required 20-days cash on hand from operations to begin to fund the account,” Williams tells Now Habersham.
Since 2020, Habersham Medical Center has received millions in additional revenue to prop up its operations, including $22.6 million in federal funds to cover pandemic-related expenses and lost revenue. In addition, in recent months the Habersham County Commission extended to the hospital a $6 million line of credit – $4 million in cash – of which at least $1.5 million has been spent.
None of those funds were applied to the debt service fund.
As of this past January, Habersham County still owed $34.8 million in principal payments on the hospital and $16.4 million in interest. County taxpayers have 21 years to pay off the $51.3 million debt.
Rebranding
While the option to purchase agreement originally ran through the end of this year, in January, all parties agreed to expedite the agreement due to the hospital’s dire financial situation. NGHS will now take over the hospital by July first. When that happens, Habersham Medical Center will be rebranded under the Northeast Georgia Medical Center name.
In February, NGHS submitted a sign permit application to the city of Demorest, revealing the hospital’s name change.
Although the word “Habersham” does not appear on the proposed signage, the hospital campus is expected to be referred to as Northeast Georgia Medical Center Habersham. It will become NGMC Gainesville’s fourth satellite campus; the others are located in Braselton, Barrow, and Lumpkin County. NGHS administrators say the Habersham campus will serve as a hub for care in the northern part of its service area.
Those wanting to learn more about the acquisition and future plans for the hospital are encouraged to attend the hearing on April 13. Habersham EMC headquarters is located off Highway 115 in Clarkesville. The hearing will be streamed live on the county website.
