Gov. Deal signs bills to encourage survival of rural hospitals, including Bainbridge’s
Published 7:11 pm Tuesday, May 16, 2017
Two new bills signed by Gov. Nathan Deal last week will hopefully go a long way toward helping rural hospitals in Georgia recoup a portion of the debt they’ve amassed.
To incentivize donors into writing larger checks to rural hospitals, Senate Bill 180 increased the value of credit taxpayers can earn from their contributions to 90 percent. Lawmakers wrote the cap at 70 percent last year, but a bigger incentive was needed, said bill sponsor Dean Burke.
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“The plan is to make that more attractive to get more money,” said Burke. “Any dollar coming to hospitals not coming from operations is a godsend, because the margins are so tight right now.”
Memorial Hospital and Manor in Bainbridge is just one of Georgia’s struggling rural hospitals, with losses of almost $10 million in the past two years. Eighteen workers were laid off in October 2016.
In January, the hospital authority signed a memorandum of understanding with The City of Bainbridge and Decatur County to refinance the debt through a bond sale, lowering its interest rate to under 3 percent and restructuring payments to three times a year instead of monthly.
The tax credit incentive could massively help Memorial Hospital, said Burke, who is also chief medical director at the hospital.
“It theoretically could go a long way toward eliminating some of that debt,” said Burke.
More importantly, he added, it would let the hospital invest in other areas, such as equipment and services that would help the hospital long term.
“Investments that will be persistent, not just short-term money,” Burke said. “That’s not sustainable.”
Memorial Hospital and Manor has reported financial improvements the past couple of months. Net income in March was $236,619 with a year to date of $230,035, a vast improvement compared to the last year to date: a loss of more than $6 million.
The other bill signed by Deal, Senate Bill 14 or the “Rural Hospital Organization Assistance Act of 2017”, empowers the Department of Community Health (DCH) to give up to $4 million in grants each year to any rural county hospital. The bill gives the Georgia legislature another mechanism for giving resources to rural hospitals.
Signing the bill into law is just step one, though, said Burke. The next phase is designating an authority to design how the grants will work and be awarded, but that process is far from complete.
“I have several thoughts on how to fund it,” said Burke.
If a hospital qualifies for and receives the grant, the money may be used in a number of ways including infrastructure development, strategic planning and nontraditional healthcare delivery systems.