SRHS could operate Wallace Thomson Hospital in Union
Spartanburg Regional Healthcare System could take over Wallace Thomson Hospital and Ellen Sagar Nursing Home under a bankruptcy settlement plan for the Union Hospital District.
If the plan is approved by creditors and a bankruptcy judge, Spartanburg Regional would operate the Wallace Thomson Hospital for three to four years before building a new hospital nearby, according to proposed settlement documents filed in U.S. Bankruptcy Court last week. When the new hospital is complete, the old facility will be sold to help satisfy millions of dollars in outstanding debt, hospital CEO Paul Newhouse said.
Newhouse said he thinks the proposal is exciting for Union County, and it will allow the community to maintain quality, sustainable health care close to home.
“The alternative is to have no hospital,” Newhouse said. “We’re still going to be a small hospital that knows everyone that comes through the door.”
The proposed plan calls for Spartanburg Regional to hire “substantially all” of the hospital district’s about 540 employees. This includes 19 physicians, 390 full-time employees, 32 part-time employees and 99 temporary employees. Spartanburg Regional will pay a $1 lease for the facility and assume all the costs of operation, Newhouse said.
The Union Hospital District previously investigated partnerships with nearby health systems to leverage the benefits of reducing costs through an economy of scale, and attracting top-ranked doctors. Newhouse said the partnership with Spartanburg Regional makes sense for the community because many people are patients of both systems.
Representatives of Spartanburg Regional were not available Tuesday.
The Union Hospital District filed for Chapter 9 bankruptcy in June 2014. According to recently filed court documents, the district has about $12.6 million in outstanding debt to creditors. In the 2013 fiscal year, the hospital system ran an $8.5 million deficit. In 2014, it had an additional $4.5 million deficit, and for the first five months of the 2015 fiscal year, the hospital system is down another $1.4 million.
The current hospital building was constructed in the 1960s and 1970s, Newhouse said. Inefficiency is one of the challenges of the Wallace Thomson Hospital, he said. Despite being licensed for 143 beds, Newhouse said only about 50 are in use.
“Union used to be a vibrant mill town 15 or 20 years ago, then that dried up,” Newhouse said.
The hospital system has struggled to stay afloat in a confluence of circumstances that include an increasingly indigent client base, shrinking insurance coverages, and dwindling Medicare and Medicaid reimbursements.
“There are very, very few independent rural hospitals across the country and in the state,” Newhouse said.
The Ellen Sagar is a 113-bed nursing home that currently has about 100 residents and 147 full-time employees, according to documents. Ellen Sagar is the only profitable component of the Union Hospital System – generating about $1 million in profits annually – in part because of a Medicaid program that offers higher reimbursements for public nursing facilities. Newhouse said Spartanburg Regional will pay a lease for Ellen Sagar, but the cost of improvements will be deducted from the payments.
The EMS system is set to be transferred to Union County for operation. The county already assisted in the purchase of several ambulances and other equipment, Newhouse said.
This story was originally published April 21, 2015 at 6:54 PM with the headline "SRHS could operate Wallace Thomson Hospital in Union."