The HCA Effect: A look inside Savannah hospital acquired by for-profit corporation

Months ago, HCA purchased Memorial Hospital in Savannah, Ga., which prior to the buy, was also a not-for-profit hospital. HCA paid $456 million in the deal, which closed February 1. (Photo credit: WLOS Staff)

HCA Healthcare, one of the largest for-profit hospital corporations nationwide, is moving forward with buying Mission Health, Asheville’s largest employer and major safety-net, not-for-profit hospital.

Months ago, HCA purchased Memorial Hospital in Savannah, Ga., which prior to the buy, was also a not-for-profit hospital. HCA paid $456 million in the deal, which closed February 1.

“Memorial's always been a good hospital,” life-long Savannah resident Terrance Johnson said. “Especially for the poor people.”

Johnson said he recently suffered a stroke and has been to Memorial’s ER several times.

“I didn’t have any insurance. They didn't turn me away," Johnson said. "They were very kind to me.”

But with cuts to government paid re-reimbursements, Memorial's former hospital board chairman Curtis Lewis said the hospital was tens of millions in debt.

“My personal feeling is the hospital was on a path to possible Chapter 11 bankruptcy,” Lewis said.

“If we continued like that, Memorial would never become financially viable,” Maria Theron, the administrative director of critical care, said.

Theron said the news that HCA was buying the hospital she has worked at for over two decades, initially, gave her pause.

“Being a not-for-profit, and now being a for-profit, that was a concern of mine,” she recalled.

But in the months since HCA took over, she is seeing a company making major capital investments.

“I've already seen positive changes. We are seeing a big infusion of capital,” Theron said.

That includes building a new children's hospital. Memorial’s new CEO Shayne George, who formerly worked at HCA hospitals in Tampa and Augusta, gave News 13 a tour of the building with construction underway.

“We did a very quick evaluation” George said. He said HCA is spending $60 million, double the prior investment. He said the goal is to have all equipment and beds and the entire infrastructure new. Corporate bosses clearly see it as a smart direction.

“You can't not have a good bottom line. These days in healthcare, you've got to manage it closely,” George said.

Part of that management was news that, just two weeks ago, Memorial laid off 85 employees.

“We did make adjustments to about 85 positions," George said.

News 13 asked George what the 85 staffers did at the hospital.

“I don't know every bit of that detail,” he said, adding that Memorial is recruiting for 200 care positions, largely nurses.

Lori Conaway, who is Memorial’s emergency room director, said staff expected change.

“It didn't happen at the bedside,” Conaway said. “There weren't any clinical positions that were impacted.”

She indicated layoffs were in areas of HR and back-office staff.

“In places where there were duplicate services,” Conaway said. “Those were the positions that we no longer needed at the local level.”

To right the ship, Conaway expects additional cuts.

“Billing procedures would be taken on by the HCA billing,” she said.

“I've got a 'wait and see' attitude,” Savannah alderman Julian Miller said.

He’s encouraged by the purchase since the hospital was struggling, but he said he knows this: “They're not in the business to run hospitals to run hospital. They're in the business of hospitals to make money.”

But HCA is investing. George showed News 13 floors in the heart and vascular tower that are also under construction. The hospital plans to add beds, including in the ICU, which George said is often at capacity.

With 177 hospitals, George said the company has leverage to negotiate for major buys.

“If HCA’s partnered with a company and we buy 50 CTs or 50 MRI machines from a particular company, we're going to ask for some discounts,” he explained.

As for specifics on how he'll make Memorial profitable, George kept it on broad terms without specifics on how he would make the hospital profitable after HCA paid off millions in debts, including county bond loans.

“We want to bring the best of HCA and the best of Memorial together,” he said.

George did say the hospital will continue to look for best practices, which is seeking and using the best and most efficient ways to do various administrative and even operations by doctors.

News 13 asked George what Asheville might see when HCA acquires Mission.

“I think in the first 90 days will be a head-to-toe type of assessment on infrastructure. Beginning to understand some of the key processes, particularly through the emergency department. That's where a lot of patients come through. I would also expect a rapid deployment of capital,” he said.

As for Savannah, Conaway, who oversees the ER at Memorial, is encouraged.

“They aren't any different with the mission. I don't think anyone at the bedside sees a difference. I feel like it's my role to make sure that that doesn't feel any different,” she said.

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