Editor’s Note: This article has been updated with additional information.
It’s the season of giving, and that’s exactly what the Habersham County Commission did at their regular monthly meeting Monday night.
The county commission agenda was amended to add “Request from Habersham County Medical Center” as the last item on the agenda. Tyler Williams, Chief Executive Officer of Habersham Medical Center, asked commissioners for financial help.
“Earlier today, the Habersham County Hospital Authority had a called meeting to go on and request the county commission to please extend us a line of credit of $1.5 million,” Williams said.
“We need to stop the bleed. They need to tell us how they’re going to stop the bleed.” – Habersham County Chief Financial Officer Tim Sims addressing HMC’s request for bailout funds
“It’s no secret that the healthcare industry is in somewhat of a state of flux right now on the backside of the pandemic. Patient volumes are down, which means our revenues are down. Expenses continue to be there and are increasing at an astronomical rate, and therefore, that puts us in a not positive position from a cash flow standpoint,” he added.
Williams told commissioners the hospital is also hurting due to its disproportionate share payments to the state.
“I think at the end of November, we put forth about $260,000 that we had to float until the end of December, where we will see some of that money back. But it’s very difficult given the cash position we were in prior to floating that money,” Williams said.
Williams assured commissioners the $1.5 million line of credit would be used to pay the outstanding debts.
“It would only go to our vendors. It would not be spent on any equipment, purchases, or anything such as that,” he said.
Habersham County Commissioner Dustin Mealor stated that “either we approve this [line of credit] or, in effect, we are approving the imminent wind down of the hospital.”
“If we don’t get this money, we will do everything we can to stay open, and we have been doing everything that we can to become more efficient and to become more viable from a financial standpoint,” Williams said. However, he added, “It would be very difficult to operate without this infusion [of money].”
WATCH Habersham County Board of Commissioners meeting Dec. 19, 2022
Repayment?
Habersham County Attorney Donnie Hunt explained that in the past, the county commission extended a $1 million line of credit that was repaid and later extended a $5 million line of credit that was never used. It expired in August of this year.
Where will the money come from? That is the question commissioner Ty Akins asked Palmer.
Chairman Palmer stated that the money would come from the American Rescue Plan funds the county has received and not the General Fund.
Using ARP funds may cause further delays in the completion of approved projects. This past summer, it was suggested that some of the ARP funds would be used to complete some of the SPLOST-approved projects that have come in at a much higher price than originally budgeted. Just last month, the county commission approved $3.4 million of ARP funds to be used for Phase 1 of the Airport Hangar Expansion Project for 24 hangars, which is not a SPLOST project.
Mealor distanced himself from the hangar project, floating the possibility of canceling it.
“When I was on vacation, there was a project approved to use ARP money. Maybe, we have to cancel that project,” he said.
Commissioner Harkness pointed out there was no repayment plan form the hospital included in the documents he received.
“Is there a plan for repayment?”
“We can work on getting one of those for you,” Williams replied.
Commissioner Mealor spoke about being three years into the buy-out agreement with Northeast Georgia Health System and there being no money. However, he said, the alternative of letting the hospital wind down is not good. He expressed his belief that the county won’t get back its money. However, he also expressed that, should the hospital close, the economic impact would be worse.
Commissioner Harkness said he was not in favor of the line of credit given that the citizens are already on the hook for $36 million.
Cost of not having a hospital
Chairman Palmer brought forward a study from Habersham County Emergency Services Director Jeff Adams on what the cost would be to the county should the hospital close. In Chief Adams’s report, the cost to the county to run the EMS service to Northeast Georgia Medical Center would be nearly $2 million. That amount would include two more ambulances and additional personnel. Plus, ambulances would be out of the county longer due to waiting times at the ER in Gainesville, whereas those same ambulances could be back in service for calls within 12 minutes if Habersham County Medical Center remained open.
Palmer explained that if the hospital paid their accounts payable now with the money they currently have, in two weeks, they won’t be able to make payroll.
“It’s either do this (extend the line of credit), I mean, how responsible would it be for us to allow the hospital to shut down in the height of flu season, with all the cases of RSV. I mean, we can agree to disagree. Just the $1.9 million that we would have to put into EMS, and there are no assurances that we will be able to hire people. We can’t hire paramedics right now. As bad as this is to say – $1.5 million is a lot of money – don’t get me wrong, but the effects of not doing this is [sic] far greater on this community.”
Agreeing with Palmer, Harkness said, “I’m not trying to debate you on this issue, but when they are losing $700,000 to $1 million a month, somebody has to answer, somebody has to ask the hard questions and I know 50% of the people watching this video may be mad as heck at me, and I hope 50% of the people are glad that I am asking the questions. It didn’t creep up on us.”
Chairman Palmer stated, “To allow the hospital to shut down now, would be very irresponsible.”
“That’s not me doing that. I am a county commissioner, and I answer to the taxpayers,” Harkness said.
It was at that point that Palmer, who has been adamant about not allowing unscheduled speakers during meetings, allowed two local radio hosts to address the commissioners.
Hazel Cording spoke about a recent medical emergency that she had and how thankful she was that the hospital was close by. She also stated that she had not had good experiences at the ER in Gainesville in the past, and if not for HMC, she probably would not have gone to Gainesville.
Nora Almazan then spoke about the need for HMC to be in the community and how often she and her family have used the hospital over the years during times of emergencies. She stated that the hospital was more important than the jail, the airport, or the landfill.
Following their statements, Commissioner Harkness stated, “You were very convincing. I went there myself last year. My wife went there last year. My daughter went there last year. I love the hospital. I’m very proud of the hospital. It’s not us making these business decisions out there that’s got to this point, is my point. My point is it’s now in our lap to bail out using funds that could be used for other things. That’s my point. Now, what’ll you do? I was an absolute no until Hazel Cording spoke.”
Even after announcing he was changing his vote, Harkness stressed, “That ARP money is going to be gone soon.”
“I know it, and that concerns me too,” Mealor said. “Now we almost have to hold that money as a rainy-day fund.”
Stop the bleed
In an attempt at political distancing, Harkness stated, “We have no control over the hospital. None. We, Board of Commissioners, have no control over what they do. They have their own authority, they’re ran [sic] by their own authority and for the sake of our local hospital, for the sake of our local people.”
“We need to stop the bleed,” said Habersham County’s Chief Financial Officer Tim Sims. “They need to tell us how they’re going to stop the bleed. We are using our money that we could be using for other things to help citizens, I know that, but we need to find out that. That’s not what we’re getting told.”
Commissioner Harkness added, “We have to remember when people’s taxes have to go up next year, we can’t fuss.”
Commissioner Mealor brought up the point that Georgia was a holdout several years ago for expanding Medicaid and is still a holdout. Williams reminded him that the state legislature made it illegal to expand Medicaid. He also stated that prior to the pandemic, about 15% of the business was in indigent care. However, the patients would not complete the paperwork necessary to qualify under indigent care. Therefore, it was booked as uncompensated care.
Commissioner Mealor asked why Georgia continued to hold out on expanding Medicaid “when other states are getting money that we’re refusing.”
At least nine rural Georgia hospitals have closed since 2010. Even with the federal government pitching in at 90% of the cost, Medicaid expansion would still take some extra state money, which Georgia’s Republican-led legislature has always opposed.
Chairman Palmer asked for a motion on the hospital’s request.
Although the item was added late to Monday’s agenda, commissioner Ty Akins made it clear the commission has been discussing the issue for some time.
“I don’t think any of us sitting up here has taken this decision lightly. I know we have spent a lot of time deliberating this, discussing this, and trying to find every option we can. I appreciate Mr. Harkness’ concerns. I hear those same concerns from our taxpayers. It’s been an ongoing burden on our taxpayers, but due to the fact that we will have some oversight as it’s laid out in this agreement and since we are using ARP funds, I think we are making the best out of a very difficult situation. So I will go ahead and make the motion that we go forward with the $1.5 million line of credit and authorize the Chairman to sign the agreement.”
Commissioner Mealor seconded the motion.
Chairman Palmer stated that since this was added to the agenda, he wanted to ensure that the votes were recorded and asked the county clerk to do a roll call vote.
Despite their pointed questioning and concerns, commissioners voted unanimously to approve the $1.5 million line of credit, potentially putting Habersham taxpayers on the hook for more money aimed at bailing out the failing hospital, which in two years will belong outright to Northeast Georgia Health System.
Bandaid fix
Following Monday night’s meeting, Now Habersham asked Harkness about his decision to reverse his vote. While it’s likely the measure would have passed without him, Harkness said he did what he felt he had to do to ensure hospital employees can get paid here at Christmas, but added, it’s just a bandaid. The line of credit will only get the hospital through the next month, he said, since the hospital has been losing between $700,000 to $1 million monthly for the last several months.
“All we did last night was put our pinky finger in one hole in a busted dam with a thousand holes,” Harkness told Now Habersham. “None of us want to lose our hospital. Many of our friends and family members use the hospital. But the hospital is in terrible financial condition, and the taxpayers cannot keep bailing out the hospital because we still owe $36 million on the hospital as it is.”
Harkness said hospital administrators must figure out a way to trim their expenses and live within their budget immediately “or face a certain reality of having to curb services or the worst case of closure.”
“Hopefully, in the worst scenario, they will keep the emergency room open, if nothing else.”
Harkness insists this is the last time he will vote to bail out the hospital.
“I will not go along with any future bailouts using taxpayers’ money. This is a business, and it has to be run as such, and if they cannot make a profit without the taxpayers having to bail them out, then other options will have to be looked at, and some options are very serious.”
