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Survey: Tennessee hospitals cutting services in response to post-pandemic financial pressure

The cleaning staff dust mops the emergency department lobby of the Haywood County Community Hospital while waiting on the first patient to arrive. The hospital closed in 2014 and is being reopened by Braden Health, which has acquired four hospitals between Memphis and Nashville.
WPLN
/
Blake Farmer
The cleaning staff dust mops the emergency department lobby of the Haywood County Community Hospital while waiting on the first patient to arrive. The hospital closed in 2014 and is being reopened by Braden Health, which has acquired four hospitals between Memphis and Nashville.

Many Tennessee hospitals are in trouble as they try to stabilize after the trauma of COVID-19. The Tennessee Hospital Association has published a new survey that finds: Now that pandemic relief money has dried up, nearly half are at risk of closure.

Facilities are still losing money, with profit margins near -3%, even as profit margins have moved into positive territory nationally. One difference in Tennessee is that fewer people are covered by Medicaid here, which has not been expanded under the Affordable Care Act.

But THA chief operating officer Will Cromer says hospitals are also going to need higher payments from health plans. They’re paying much more for staffing, especially nurses, but not able to pass that cost along because of multi-year contracts. THA found expenses were more than $3 billion higher than before the pandemic.

“Where we are right now is unsustainable, and we need to hopefully address some of that,” Cromer says. “Without addressing the problem, there are real risks ahead.”

More than half of Tennessee hospitals (57%) say they’re already trimming or eliminating services altogether. Even before the pandemic, Tennessee had more rural hospital closures than any state but Texas. There are now twice as many hospitals in Tennessee at risk of closure than in 2019.

“This risk does not reflect imminent closure but highlights risk due to unsustainability of operations,” says Erik Swanson of Kaufman Hall, which conducted the survey. “Federal and state relief during the pandemic was vital to hospitals, but it was short-term and masked what are now longer-term issues of sustainability.”

Blake Farmer is Nashville Public Radio's senior health care reporter. In a partnership with Kaiser Health News and NPR, Blake covers health in Tennessee and the health care industry in the Nashville area for local and national audiences.
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