Why is one of Georgia’s most inclusive hospitals closing?

Wellstar Health System just announced that they plan to close their Atlanta hospital by November 1st. This closure will be a huge blow to the Atlanta community, as this safety net was one of the most inclusive and generous hospitals in the state, according to the Lown Hospitals Index for Social Responsibility.

Wellstar Atlanta Medical Center ranked #2 on patient inclusivity in Georgia, which it earned by caring for a disproportionate amount of patients from lower-income communities and communities of color. In one of the most racially segregated hospital markets in the US, Wellstar Atlanta was one of few hospitals serving a large proportion of patients from communities of color.

“This decision will have deep and reverberating consequences for the half a million residents of Atlanta and the hundreds of thousands of visitors and commuters to our city each day.”

Andre Dickens, Mayor of Atlanta

Wellstar Atlanta did all this while facing one of the highest Covid-19 burdens during the first year of the pandemic. Wellstar Atlanta spent more than ten months of the first year of the pandemic with at least 10% of their hospital occupied by Covid-19 patients. Other hospitals in Atlanta passed this threshold for less than half the time that Wellstar did.

City officials reacted to the news of Atlanta Medical Center’s closure with dismay. “This decision will have deep and reverberating consequences for the half a million residents of Atlanta and the hundreds of thousands of visitors and commuters to our city each day,” Atlanta Mayor Andre Dickens said in a letter to Wellstar executives. Mayor Dickens is currently working with Wellstar to try and find a way to keep the hospital open before November.

Why would Wellstar close its Atlanta branch, which is clearly a lifeline for the community? Unfortunately it appears that the hospital’s role as a safety net is exactly what made it financially unsustainable. Wellstar Atlanta reported that 16% of its operating expenses went to uncompensated care, far higher than the national median of 3%. And Medicare, Medicaid, the uninsured accounted for about two-thirds of its payer mix. Wellstar reported they have invested more than $350 million to support operating losses and capital improvements over the past six years. In the past year alone, inflation and increased cost of staffing and supplies led to a loss of $107 million. In the end, Wellstar did not see a path to sustainability for Atlanta Medical Center.

However, other hospitals and community leaders argue that Wellstar’s decision to close their Atlanta hospital was not made out of necessity, but out of desire for profit. Spokespeople from Grady Memorial Center (which ranks #1 on community benefit and inclusivity in Georgia) wrote:

As a not-for-profit health system, Wellstar’s mission was to enhance the health and well-being of every member of the community, but they have clearly prioritized profits over people leaving 460 licensed hospital beds in the community empty and more than 120 patients per day having to seek emergency care elsewhere. Grady is really the only true safety net in Georgia, and it runs over capacity daily, and this decision by Wellstar to abandon the community will further strain our operations, particularly our emergency room, as more patients will present with medical needs. 

Despite the losses from their Atlanta hospital, the Wellstar system had more than $150 million in net income in 2019 and 2020, according to their tax filings. The system also received $186 million in relief funds from the CARES Act. One could argue that as a nonprofit, the Wellstar system has a duty to their community to provide needed care, even though it puts a damper on their bottom line.

On the other hand, why is it up to just two hospitals in the Atlanta area to bear the entire burden of uncompensated care? What is the responsibility of the Northside Healthcare System or Emory Healthcare — both of which have hospitals in Atlanta with poor inclusivity grades — to care for patients in low-income communities and communities of color?

Whether or not closing the Atlanta hospital was a necessary move (as Wellstar officials claim) or a profiteering one, this case illustrates a disturbing truth about hospitals in America. Hospitals that care for the communities most in need, those facing high rates of poverty and barriers of structural racism, get paid less than hospitals caring for wealthier, whiter patient populations. It is maddening to see a hospital like Atlanta Medical Center, which cared for more uninsured patients and Covid-19 patients than most other Atlanta hospitals, have a full emergency department and still not receive enough money to stay in the black.

Our current system incentivizes hospitals to compete for privately-insured patients for elective procedures, not uninsured or publicly-insured patients who need treatment for chronic conditions. As long as hospital financial sustainability continues to be divorced from its value to the community, we will keep seeing heartbreaking hospital closures like this one.