Wellstar Health System plans to close Atlanta Medical Center, a 532-bed hospital that has shouldered a disproportionate burden of unpaid care in the region.
The nonprofit system will begin cutting services and closing the hospital by Nov. 1 after determining the facility cannot sustain falling revenues and soaring labor costs and supply, Wellstar said in a press release on Wednesday evening. Atlanta Medical Center posted significant operating losses from 2017 to 2021, racking up $107 million in losses in the past 12 months alone, according to the health system.
The Atlanta Medical Center, which also operates inpatient psychiatric and rehabilitation facilities, has historically provided above-average unpaid care, a combination of unpaid patient and insurer payments, and charitable care. Its unpaid care as a percentage of operating expenses exceeded 16% from 2017 to 2021, significantly exceeding the median of about 3%, according to self-reported Medicare Cost Report data from more than 2,500 acute care hospitals in short duration.
Medicare, Medicaid, the uninsured and the indigent made up about two-thirds of its payor makeup, according to data from the cost report.
Once Atlanta Medical Center closes, the city will have only one Level I trauma center at Grady Memorial Hospital — the next closest would be 80 miles from Atrium Navicent Health Medical Center in Macon, a said Ian McCarthy, associate professor of economics at Emory University in Atlanta.
“This certainly doesn’t bode well for access to care, especially among some of the most vulnerable populations in our region,” he said.
Atlanta Mayor Andre Dickens wrote a letter to Wellstar executives, calling on them to provide more information about mitigation strategies and plans for the campus and current staff. In May, Wellstar consolidated inpatient services at Atlanta Medical Center South and converted its inpatient operations to primary care and rehabilitation services.
“This decision will have profound and resounding consequences for Atlanta’s half-million residents and the hundreds of thousands of visitors and commuters to our city each day,” Dickens said in his letter. “The City of Atlanta received no notice of this decision and had no opportunity to engage with you to understand or help mitigate the factors leading to this closure.
Georgia’s failure to expand Medicaid was likely a motivator for closing the hospital, said William Custer, former director of the Center for Health Services Research at Georgia State University.
The health system tried to work with government agencies, healthcare providers and local organizations to stabilize the hospital, but to no avail, according to Wellstar CEO Candice Saunders. Executives did not specify how many employees will be affected.
“For several years, Wellstar has continued to invest and operate AMC with significant losses to allow more time to partner on a creative, long-term and sustainable solution for the future of the hospital,” said Saunders said in the press release. “After an exhaustive search for a solution that would meet the health needs of the community, we are disappointed that a lasting solution at AMC has not emerged.”
Piedmont Healthcare, the state’s largest healthcare system, has encroached on Wellstar’s market share after a series of recent hospital acquisitions. Piedmont added eight Atlanta area hospitals in 2021 and 2022 and its footprint now includes 19 acute hospitals,
Wellstar has recorded healthy operating revenues over the past few years. The 10-hospital system had operating profit of $377.1 million on $4.25 billion in revenue in 2021. That was up from operating profit of $142.5 million in 3 $.78 billion in revenue in 2020.
In the nine months ended March 31, Wellstar reported operating profit of $151 million on $3.48 billion in revenue.