Following the unexpected news of a major Atlanta safety net hospital’s impending closure, Georgia officials are reportedly discussing a massive, nine-figure influx of American Rescue Plan funds to bolster the city’s public health system.
On Aug. 31, Wellstar announced plans to shut down its 460-bed Atlanta Medical Center (AMC) on Nov. 1 citing the pandemic and “intense financial headwinds straining healthcare organizations right now.”
The nonprofit health system said that it had pumped over $350 million into the hospital since taking over operations in 2016, including $107 million in losses during the past 12 months.
“For several years, Wellstar has continued to invest in and operate AMC with significant losses to provide more time to partner on a creative, long-term, sustainable solution for the hospital’s future,” Wellstar CEO Candice L. Saunders said in the announcement. “After an exhaustive search for a solution that would support the healthcare needs of the community, we are disappointed that a sustainable solution at AMC has not emerged.”
Financial disclosures filed by the company show over $145 million in net operating losses attributed to AMC during the 2022 and 2021 fiscal years (ended June 30).
Wellstar as a whole reported $377.1 million in operating income during 2021, but a $40.9 million operating loss from January to March (its most recently closed financial quarter).
Wellstar said in its announcement that it would be “implementing a comprehensive transition plan” to wind down services and minimize disruption for its patients.
However, local media reports a scramble among city and state government officials worried about increased strain on Grady Health System, a public system with a flagship hospital that would stand as the city’s only remaining Level 1 trauma center.
Atlanta Mayor Andre Dickens wrote to Wellstar’s leadership on Sept. 9 criticizing the organization’s decisions to close both AMC and another emergency department earlier in the year.
Dickens said that the closures will weigh heavily on the low-income populations AMC served. He stressed that “Wellstar still has a responsibility to this community” and said the system needed to more clearly detail its transition plans for patients, staff and students as well as work with the city and other stakeholders to ensure AMC’s facilities can again deliver care in the future.
“Separate from our conversations with Wellstar, my team and I have engaged other healthcare providers, federal, state and county leaders, neighboring municipalities and other stakeholders as we have studied the impact this closure will have on our communities and explored options to ensure continued access to high-quality and affordable healthcare for our residents,” the mayor wrote in the public letter.
Recent reports suggest that these efforts could involve Georgia’s allocation of American Rescue Plan funds.
Citing unnamed officials, the Atlanta Journal-Constitution reported ongoing talks of a one-time aid package of almost $200 million for Grady Health System, which it would use to add nearly 200 beds to its flagship hospital.
More than $100 million of that total would come from the federal relief funding, according to the sources, with tens of millions more funneled in via private philanthropies.
The newspaper noted that the use of the relief funds is at the sole discretion of Georgia Gov. Brian Kemp, who is up for reelection a week after AMC’s scheduled closure.
His Democratic opponent, Stacey Abrams, has painted the closure as a policy failure stemming from Kemp’s opposition to Medicaid expansion.