Anna Claire Vollers - Stateline.org

THOMASVILLE, Ala. — It was a moonshot effort for a small Southern town: Open a brand-new rural hospital in the poorest region of one of the poorest states in the nation.

Thomasville, which has fewer than 4,000 residents, sits in the middle of Alabama’s Black Belt, so named for its rich, black soil. The rural, southern swath of Alabama is steeped in history and culture, and home to the most economically disadvantaged counties in the state.

The nearest interstate to Thomasville is almost 70 miles away. Harper Lee’s 1960 book “To Kill a Mockingbird” was inspired by Monroeville, one county over. To the northeast, across the Alabama River, the famed quilters of Gee’s Bend craft their works of art. Roads are lined with pine forests and farmland.

Thomasville’s energetic, gravel-voiced mayor is a man named Sheldon Day. He’s been mayor for the past 28 years, and he’s passionate about health care. As rural hospitals around the country faced declining reimbursements, workforce shortages and rising costs, Day and other Thomasville leaders laid careful plans to open a hospital that would provide the care that was disappearing in communities like theirs.

They partnered with a Birmingham investor who believed in the project. They secured millions in federal grants and loans. Residents voted for a half-cent sales tax to support it.

“We didn’t want it to be a doc-in-the-box, a stop on the way to a larger hospital,” Day said. “What we were trying to do here in Thomasville is to be transformational.”

The hospital was intended to improve access to care for the entire region. It would treat Black Belt residents who had been driving 100 miles or more just to see a pediatrician. It was supposed to defy the odds that shuttered half a dozen other rural hospitals in Alabama in recent years and left even more at the brink of closure.

The new Thomasville Regional Medical Center opened on March 3, 2020.

It turned out to be the worst possible timing.

Four and a half years later — battered by a worldwide pandemic, a series of financial missteps and a health care landscape increasingly hostile to rural hospitals — the facility closed.

But maybe not for good. A court-appointed receiver is overseeing the shuttered medical center, and Thomasville has limited control over who might buy it. City officials don’t know whether the new owners might share the town’s vision of being a regional health care hub. And they have limited influence on state lawmakers’ decisions about Medicaid expansion and health care funding.

And yet Day and the town remain cautiously hopeful. Their $40 million, 29-bed facility is dormant but practically brand new — a far cry from the decades-old hospitals common in rural America. The town’s leaders are focused on leveraging any political power they can muster to make their case to state lawmakers and potential investors. And they’re armed with hard-won lessons learned over the past four years.

The health of their families and neighbors hangs in the balance. Losing the hospital would mean longer drives for care, missed treatments and riskier health outcomes, especially for the community’s most vulnerable. It would mean fewer local health care jobs. For the Black Belt at large, it would mean one more hospital gone, one more failed attempt to persuade state leaders to prove they care about the health of rural and poor people.

“In the health care debate in this state, I wish everybody could come down here and see the void,” Day said, “but also the opportunity and the possibilities.”

A long drive for care

These days, Day can’t go anywhere — not church, not the grocery store, not even the men’s room — without getting asked by residents about the hospital and when it might reopen. He’s weathered criticism from some.

On a recent Thursday afternoon, the mayor was in his office at City Hall, not far from Thomasville’s downtown strip, preparing for a court hearing. He didn’t expect it to take long; the judge just wanted an update on the hospital’s foreclosure and receivership proceedings. Also on Day’s schedule was a call with an attorney for the bank that currently owns the hospital. Earlier in the week, he’d given hospital tours to two different prospective buyers.

A few streets over, not far from the shuttered hospital, Angie Wise was at Family Medicine Pharmacy, preparing for her husband Mark’s retirement party. The couple opened the independent pharmacy in Thomasville 41 years ago, where Mark has been the pharmacist ever since.

They’re looking forward to retirement. But Angie is worried about the dwindling health care options left in her community. She worked as a nurse at the old Thomasville hospital in the early 1980s. Back then, it provided a wide range of services, from labor and delivery to intensive care.

“Most patients were treated in Thomasville, which made it easier for the patient and their family,” she said. Now, most specialized services require a long drive out of the Black Belt, a hundred miles down to Mobile on the Gulf Coast, or 77 miles west to Meridian, Mississippi. “Many people just cannot miss time from work for a three-to-five hour visit to a specialist, so they postpone appointments or cancel appointments.”

There aren’t any pediatricians in Clarke County, nor in most of the counties surrounding it. The nearest hospital that delivers babies is 60 miles away.

“As a nurse,” said Wise, “I feel that no matter where you live, you should have access to quality health care.”

Like an oncoming train

Day compares the hospital’s closure in September to spotting a car sitting on a railroad crossing in the distance, watching a train speeding toward the car, and being unable to reach the car in time to save it.

The hospital’s financial trouble started within weeks of its opening in March 2020, as the COVID-19 pandemic shutdowns began. Through April, hospitals weren’t allowed to perform elective procedures or diagnostics — the kind of services that typically make money. Out-of-town specialists who’d agreed to provide treatment at the hospital were no longer able to do so.

In a particularly hard blow, Thomasville’s hospital was one of just three hospitals nationwide that lost out on millions in federal pandemic relief funds because it was so new that it didn’t have the required number of yearly financial statements. The hospital received $1 million, far short of the $8 million leaders thought it deserved. Day took several trips to Washington, D.C., to try to convince federal officials to change their rules. By the time they did, the funding had run out.

Meanwhile, the hospital’s private owners had plunged the facility further into debt in an effort to keep the doors open. Day characterizes many of the choices as financial miscalculations. The hospital eventually defaulted on $35 million in loans and went into foreclosure.

In the final days before the hospital closed, employees had been working for two weeks without pay.

“We had doctors who were working in the ER who offered to put in tens of thousands of dollars to help make payroll,” Day said. Eventually, after a judge assigned a receiver to take control of the hospital and its assets, the hospital was able to pay all of its employees for the weeks they had worked.

“We had our legs kicked out from under us, pretty much from Day 1, and things went downhill from there,” Day said. “That’s why I’m telling all these folks visiting who are looking at purchasing the hospital that you’re not looking at a turnaround — you’re looking at a startup.”

A crisis getting worse

“Medicaid expansion” is a dirty expression in the halls of Alabama’s Republican-dominated statehouse.

Business executives, advocacy groups and medical associations have begged state lawmakers for years to let Alabama join the 40 other states that have taken federal funding under the Affordable Care Act to expand Medicaid to cover people making up to 138% of the poverty line. It’s a move that experts say would also bring much-needed funding to struggling hospitals. Expansion could push an estimated half a billion dollars into the state, but for opponents, it also carries the Obamacare stigma.

So instead, leaders like Day often talk about “taking advantage of the federal dollars available to us” when asking lawmakers to consider Medicaid expansion.

He’s a pragmatic Republican in a conservative-leaning county in a solidly Democratic congressional district in a ruby-red state. He’s accustomed to treading political tightropes.

“Obama hasn’t been in office in how many years? We need to quit beating that horse, get rid of those political blinders we have on and figure out what is affordable for us to do,” Day said. “Because this is a crisis, and the crisis is getting worse.”

In the past 20 years, 109 rural hospitals have closed around the country, while another 84 have been converted to other types of facilities such as nursing homes, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill. Alabama has lost six rural hospitals in that time, plus two more that converted.

Nationally, operating margins for rural hospitals in non-expansion states such as Alabama are consistently lower than those in states that expanded Medicaid, according to an analysis by health policy and research organization KFF.

Half of Alabama’s hospitals were operating in the red as of 2022, according to the Alabama Hospital Association. In August, Grove Hill Memorial Hospital, about 15 miles south of Thomasville, became the fourth Alabama hospital in a year to close its labor and delivery services. It’s also one of at least four hospitals around the state that have recently announced plans to halt all inpatient services and convert to Rural Emergency Hospital status, under a new federal program designed to save dying rural hospitals by paying them millions to focus on emergency care.

Day said the program isn’t a good fit for Thomasville Regional because the facility is brand new and outfitted to provide a variety of inpatient and surgical services. Plus, he said, becoming a Rural Emergency Hospital would mean a much smaller staff. Before it closed, Thomasville employed around 110 people, Day said.

Day has spent many hours in Montgomery, meeting with state legislators and with Alabama Republican Gov. Kay Ivey, who grew up in neighboring Wilcox County. The state lawmakers who represent Day’s town are Democrats, elected by majority-Black districts. Alabama Democrats support Medicaid expansion. But in a state where Republicans control every branch of state government and fill every statewide office, Democrats wield little political power.

Day is pragmatic. He argues that expanding Medicaid is not only a moral imperative, but also would be good for the economy. He points out that rural communities — Black and white, Democratic and Republican — already have opened their wallets to support health care facilities.

“I’ve told the folks at the governor’s office and others that it’s not communities and counties that aren’t stepping up to do what they can,” he said. “Every city I know of in these rural areas — us, Grove Hill, Jackson, Evergreen, Monroeville — all of us have passed local taxes to go toward our health care facilities over the last five or six years.”

He hits his steering wheel for emphasis as he drives his SUV on the way to an appointment.

“I’m as Republican as anybody, but we have passed taxes to get this done. And now we need the state to take advantage of the federal funding” that would cover 90% of the cost of Medicaid expansion, “and all they’ve got to do is come up with that last 10%.”

Alabama Republican House Speaker Nathaniel Ledbetter has said he’s willing to have a conversation about expansion, and lawmakers have held joint committee sessions to study the issue. But Ivey and others, particularly some hardliners in the state Senate, remain publicly skeptical and question the long-term costs of expansion.

Day refuses to be put off.

“I’m encouraged that it appears that the legislature and the governor’s office and others are, at least as a whole, seriously looking at the status of health care in the state and what we can do to fix the problem,” he said. “Nobody wants to see dozens of hospitals close under their watch.”

Stocked and ready

In the quiet hallways and exam rooms at the Thomasville Regional Medical Center, cabinets are stocked and equipment stands at the ready. At a nurses’ station, charts and other paperwork still lie on the desks as though someone has only momentarily stepped away.

Stacey Gilchrist is one of the few people who currently work in the building, overseeing the facility and helping the court-appointed receiver with administrative tasks. Gilchrist, a nurse who’s spent her 40-year career in Thomasville, was the operations manager for the hospital when it was still open.

The hospital saved dozens of lives, she said, even when people needed services the hospital didn’t offer. It doesn’t have a labor and delivery unit, but more than once, women in labor who weren’t able to make it to the nearest delivering hospital showed up at Thomasville’s ER.

“We don’t have incubators, but we had a staff that was out of this world, and they made it work,” she said, recalling how nurses warmed IV bags to try to raise the temperature of a newly delivered baby while they waited for neonatal specialists to arrive by ambulance. “It would give you chills to see what all they had to do. They had to get inventive, but they worked their fannies off and that baby and mama both survived.”

As Day and Gilchrist stand in the hospital’s airy atrium, they talk about their hopes that the hospital’s buyer — whoever it might be — will work not just to bring back specialties that were lost but also invest in new services that could be located on the hospital’s 40-acre campus, such as a long-term care facility or a cancer treatment center.

There are at least four prospective buyers interested in the hospital; three have signed non-disclosure agreements to begin negotiations, according to Day. He tells people he doesn’t yet have a concrete timeline, but he does believe the city has a seat at the table.

The final decision on who buys the hospital will rest largely with the bank, North Avenue Capital, and must be approved by the judge.

“The only money the bank’s gotten out of this has been the tax dollars the city’s put in, so they’re listening closely, and I think they genuinely want us to be part of that process,” he said.

“Rural health care is an existential crisis, and the only thing that’s going to fix that is everybody sitting down in a full understanding.”

Stateline is part of States Newsroom, a national nonprofit news organization focused on state policy.

Admin/Leadership