The signs announcing Northeast Georgia Medical Center’s arrival in Habersham County are waiting to be unveiled. Crews installed the new signs outside the Demorest hospital earlier this week. They’ll remove the temporary covers over them on Saturday when the name change becomes official.
Habersham County will officially transfer ownership of its hospital and all its assets to the Hall County and Gainesville Hospital Authority on July 1. By default, that gives control of the hospital to Northeast Georgia Health System (NGHS).
The Habersham campus will further expand NGHS’ footprint in the region. NGHS already operates hospitals in Gainesville, Braselton, Barrow, and Lumpkin counties. The transition marks the end of an era for Habersham, which has owned and operated the hospital for 70 years.
New owner. Old debt.
The transfer of ownership comes a year earlier than expected and at a time when the hospital continues to lose money. Documents obtained by Now Habersham show that as of March 31, 2023, Habersham Medical Center was operating at a loss of $3,873,218 (unaudited) for the current fiscal year.
Northeast Georgia Health System has been working not so behind the scenes these past several months trying to change that. Under a management services agreement with Habersham Medical Center signed earlier this year, NGHS has guided Habersham’s Hospital Authority through a series of cuts. The hospital “paused” intensive care admissions, scaled back its operating schedule from five to three days a week, stopped on-call surgeries, and removed from its books the hospital-run fitness facility – Total Fitness.
Even with those cuts to shore up finances and make the hospital solvent, it won’t blunt the impact of what the hospital already owes. Hospital revenue bonds secured by the Authority to pay for a $38.6 million expansion and renovation project in 2008 have left taxpayers saddled with debt.
According to the Habersham County Hospital Authority’s 2021 audited financial statement, as of 2023, the principal amount owed on the bonds is $34,880,000, with interest of $16,448,921.
The debt service on those bonds will cost Habersham County taxpayers over $3 million this year alone.
NGHS is acquiring Habersham Medical Center (HMC) in exchange for investing $15 million into the property. The terms of the Option to Purchase Agreement signed in 2019 also called for a debt service fund to be established to help offset what taxpayers owe. However, the fund never accrued any money, former HMC CEO Tyler Williams told Now Habersham.
Williams helped negotiate the OPA and was named Habersham Medical Center’s CEO in 2020. He blamed the hospital’s financial troubles on decreased patient volumes and the cost of indigent care.
Other rural hospitals in Georgia have folded under similar pressures.
In 2020 and 2021, Habersham Medical Center received an infusion of $22.6 million in federal funding through CARES and ARPA. Habersham County commissioners approved two bailouts this fiscal year totaling $4 million.
The Habersham County Hospital Authority fired Williams and three other top adminstrators at the end of April. They received a combined $408,541 in severance payments – over 10% of the total county bailout.
Grand opening
Following the administrative shakeup, Habersham’s Hospital Authority named NGHS’ Vice President of Facilities and Support Kevin Matson as interim president. More recently, NGHS has promoted him to vice president of regional hospitals. In his new role, which he’ll assume once the Habersham transition is “complete and stabilized,” Matson will oversee operations at both Habersham and Lumpkin County hospitals.
Those operations in Habersham now also include three new healthcare providers who have been recruited by NGHS.
High on the hopes that better days are ahead for Habersham’s hospital, Northeast Georgia Health System has planned a communitywide event to celebrate its ‘grand opening.’
The event, dubbed Habersham Jam, is scheduled from 6 to 9 p.m. on Saturday, July 15.
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