What is Atlanta Really Losing?

One of Atlanta’s more venerable institutions, Atlanta Medical Center, closed down today amidst a huge public outcry. Accusations have been flying and finger-pointing is happening in all directions; the political implications are significant. There’s no doubt that many in the community are upset. That said, a closer look at the situation leaves me scratching my head. Despite claims, this situation has been developing for years; and further, the hospital really wasn’t providing that much of a public service anymore.

I should start by noting that I lived literally next door to Atlanta Medical Center from 2006 through 2009; my apartment balcony directly overlooked their helipad. Because of limited parking in my residence’s lot, I rented a parking space in their deck off-and-on during this time. This required me to visit their business office, and the condition of their facilities, even then, was so off-putting that I instructed my loved ones never to send me there for medical care. The effect of that particular experience was that I tended to support any public or private assistance ideas that came up. They clearly had had state-of-the-art facilities at one point, and I figured they could again with the right kinds of support.

Unfortunately, that didn’t happen.

Before I go any further, let me also explain that I’m not a particular fan of WellStar Health Systems. I was openly critical of them during their network participation dispute with United Healthcare late last year and early this year, particularly with respect to some misinformation that they published. I don’t use their hospitals or clinics myself, and have expressed concerns that they may be attempting to build a monopoly. But a balanced look at this particular situation indicates that they’re not acting inappropriately in this instance.

WellStar, which acquired Atlanta Medical Center in 2016, had been warning that Atlanta Medical Center was in financial trouble for years. The closure announcements mention $350 million spent in an attempt to keep it up-to-date and modernized, yet during the year ending June 30, 2022, the deficit from Atlanta Medical Center caused a nearly 50% reduction in WellStar’s overall operating income surplus: $106 million as opposed to a potential $220 million. While WellStar is a non-profit, it’s important that they maintain an operating surplus in order to stay open. Zippia shows that WellStar’s revenue was $2.1 billion at its peak, meaning that a $106 million surplus is a mere 5% profit margin, which most business owners would consider far too close for comfort.

Despite the money that WellStar had put into Atlanta Medical Center, the hospital had received a one-star ranking from the Center for Medicare & Medicaid Services in 2022, placing it in the bottom 6% of hospitals nationwide when ranked by performance factors including safety, patient experience and readmission rates. While Medicare star ratings aren’t the only rankings out there, they’re certainly a significant one, and at least one other ranking service also assessed Atlanta Medical Center relatively poorly, particularly in the area of patient satisfaction.

Put bluntly, WellStar Health Systems simply couldn’t afford to keep maintaining Atlanta Medical Center, and indeed they report that they had been attempting to find a partner or buyer for nearly two years. Unfortunately, they couldn’t. They also report, in the same press release, that they had apparently attempted to seek additional government funding. That didn’t materialize either. Their options were exhausted, and in the end, closure was the only action left to take.

Further, a cursory check indicates that Atlanta Medical Center had become a duplication of services. For example, leaders at Grady Memorial Hospital — another Level 1 Trauma center that is only a mile away from Atlanta Medical Center — stated that it can absorb the trauma patient load, particularly now that it’s receiving an additional $130 million in federal aid this year. Another nearby hospital, Emory Hillandale, is expecting $12 million in additional funding as a result of anticipated increase caseload. Both hospitals have hired workers from Atlanta Medical Center as a result of these expansions. Further funding awards are under serious discussion.

In other words, the funding was there. It simply wasn’t awarded to Atlanta Medical Center, despite WellStar making requests. This does lead me to wonder why, although the hospital’s rankings are a significant clue. Another clue is that the hospital’s physicians were apparently already aware of the financial situation. In fact, a report from Prism places the Atlanta Medical Center closure in a context that suggests it’s just one more indicator of a larger trend that has been going on nationwide.

Indeed, the fact that Atlanta mayor Andre Dickens apparently didn’t start looking for a new facility operator until sometime in October — despite the fact that the closure was announced August 31 and had been plausible before then — is enough to make me wonder just how committed government leaders are to the facility given that it had clearly been failing. The time frames certainly suggest that some of the outcry is simple political posturing, meant to appease a public that truly was unaware that this situation has been developing for years.

Nobody likes change, and the loss of a well-known, well-loved institution can be emotionally significant. But in this case, I’m not so certain that the loss of Atlanta Medical Center will be as traumatic as the current media frenzy seems to imply. This would be particularly true if the campus is used to create a community health care center, offering the lower-level care that is actually needed more than an extraneous acute care hospital. That’s one of the uses under discussion for the now-closed property, and it’s one that would please me immensely. It would be a fitting legacy that honors the 120 years of Atlanta Medical Center’s existence.