The effort to lease Greenwood Leflore Hospital to University of Mississippi Medical Center is dead.
The Greenwood hospital announced Friday, hours after revealing its decision to lay off up to 80 more employees in an effort to hang on long enough to complete the proposed lease, that UMMC is no longer interested in taking over the financially troubled hospital.
Whether that means closure is imminent for the 116-year-old hospital is not certain.
Officials in Greenwood and Leflore County, which jointly own the hospital, said they were investigating options to keep the hospital open.
Even though some state officials, including Insurance Commissioner Mike Chaney, had been recently warning that the takeover by UMMC was improbable, the Greenwood hospital’s administration was stunned by UMMC’s pullout from further negotiations.
“Although we certainly can understand and appreciate the challenge of providing health-care services in the post-pandemic era, this decision was not expected based on the progress that had been made regarding a lease transaction,” the hospital said in a prepared statement. “The financial realities of providing healthcare services are impacting both organizations.”
The release said the Greenwood hospital, over the coming weeks, would be evaluating “options for the continuation of hospital services to the residents of our surrounding counties.” It also said the hospital would continue discussions with UMMC regarding access to physician services in Greenwood and Leflore County, although those discussions would now only involve the possible takeover of additional outpatient clinics. Last month, UMMC began operating the pediatric and obstetric clinics previously run by the Greenwood hospital and located across the street from it.
In its own release, UMMC’s associate vice chancellor for clinical affairs, Dr. Alan Jones, said despite diligent efforts by UMMC, the Greenwood hospital and city and county officials to work out a lease agreement, UMMC determined the takeover was “not possible due to several factors, the most significant being the current realities of health-care economics that all health systems are facing in this challenging environment.”
Jones said UMMC would also soon assume operations of an internal medicine/primary care clinic in Greenwood. That is believed to be the clinic independently owned by Drs. Henry Flautt and Kenneth Hines.
“We will continue to evaluate other opportunities as they arise in order to maintain some health-care services in the community,” Jones said in the release.
Harris Powers Jr., chairman of the Greenwood Leflore Hospital Board, said that he, Vice Chairman Marcus Banks and Interim CEO Gary Marchand met Tuesday in Jackson with several UMMC officials. Powers said they came away from that meeting “extremely confident that University and Greenwood Leflore had arrived at a solution to see this lease to its fruition.”
Powers said that when he learned from Marchand on Friday that the deal was off, the board chairman was stunned.
“Everybody was taken aback,” he said. “Surprised would be an understatement.”
Though puzzled by UMMC’s decision, Powers was not critical of the state’s largest medical institution, which operates hospitals in Grenada and Lexington as well as its sprawling main campus in Jackson.
He said, “It is the position of everyone who was involved in the negotiations on behalf of the hospital that UMMC was dealing in good faith.”
Greenwood Mayor Carolyn McAdams said she wished she knew what happened since Tuesday to change UMMC’s mind.
“It’s just hit us all so hard and so sudden,” she said.
On Friday, McAdams had traveled to Greenville to be interviewed on WABG-TV’s morning news show, during which she expressed her confidence that the lease would come together. During her drive back to Greenwood, she got the call from Powers that UMMC had pulled out.
“It took me a minute or two for the news to even register,” she said. “I just couldn’t believe it.”
She said she was not giving up on keeping the hospital open.
“We have to have some type of health care here,” she said. “I feel like it’s not over. It might be over with UMMC, but surely there is something out there that we can do as leaders of the city and even community leaders. Businesses, banks, everybody’s got to step up here, put their heads together, and see what we can do to remedy this problem that would be devastating, at best, if we did not have any type of facility here.”
Robert Collins, the president of the Leflore County Board of Supervisors, said his board had always been concerned that the proposed lease of the hospital would fall through. In a prepared statement, he said the county would work with a health-care consultant, Samuel Odle, on a plan to save the hospital.
Odle is a senior policy adviser with Bose Public Affairs Group of Indianapolis, with whom the county recently contracted. Odle and Bose have since August been analyzing the financial condition of another distressed medical institution, Delta Health Systems in Greenville. Owned by Washington County, Delta Health Systems in recent years also took over the operations of troubled hospitals in Clarksdale and Senatobia.
“We ask that the (hospital) board and interim management cooperate fully with Mr. Odle and provide him whatever information he requests in a timely manner,” Collins’ statement said. “It is vitally important that we quickly move to develop other feasible options to maintain our local hospital.”
Powers said the hospital board is planning to meet toward the end of this coming week with city and county officials to discuss “what realistic options we have.”
On Friday morning, before receiving the news from UMMC, Greenwood Leflore Hospital announced that up to 55 full-time and up to 25 part-time employees would lose their jobs. All of the impacted employees were being notified Friday. No physicians were included in the reductions, said Marchand.
The layoffs were anticipated after lease negotiations late last month with UMMC hit an 11th-hour snag. It was the third round of layoffs that the hospital has implemented since May in a desperate effort to remain solvent until what had been a hoped-for takeover by UMMC could be finalized.
Although previous layoffs have been accompanied by reductions in services provided by the hospital, that was supposedly not going to be necessary this time, according to the memo Marchand sent out to the hospital’s employees and medical staff.
“Administration evaluated our current service offerings and made a decision to continue our current mix of services,” the memo said. “We will continue with emergency, surgical, inpatient, outpatient diagnostic services (radiology, pharmacy, laboratory, etc.) and outpatient treatments, such as cancer and wound-care services.”
The hospital as of a week ago reported having 589 full- and part-time employees, down from almost 800 before the first round of cuts. Another 70 were working for Aramark, the private contractor that handles laundry, housekeeping, maintenance and food services for the hospital.
What had been reported as a major obstacle in the negotiations between the Greenwood hospital and UMMC was overcome last week when Greenwood and Leflore County officials agreed to split the estimated $9 million that had been demanded by UMMC to cover deferred maintenance at the Greenwood hospital as well as the hospital’s outstanding loan from the federal Medicare program. The Greenwood hospital has exhausted all of its available reserves and did not have the cash to cover those obligations.
Earlier efforts by the hospital to buy time have included the closure of the intensive care unit and maternity ward, a downsizing of other inpatient services, the lease to UMMC of the two outpatient clinics and the shutdown of others.
Despite those austerity measures, the 208-bed hospital has continued to lose millions of dollars every month. For the fiscal year that ended Sept. 30, the latest figures available, total losses were just under $18 million, even with the help of $9.6 million in coronavirus relief grants, mostly from the federal government.
Marchand had said earlier that without these latest cuts, the hospital would have to close by the end of November.
- Contact Tim Kalich at 662-581-7243 or tkalich@gwcommonwealth.com.
