Community Health Impact

Hospital Survival. The conversion improved the hospital's financial health and prospects for long-term survival. The hospital has been sold once since the original conversion, but community members generally seem unconcerned about who the owner is, as long as the hospital remains operational.

Access. There is conflicting evidence whether the conversion resulted in barriers to access for the uninsured or Medicaid patients. Medicaid's share of hospital revenue declined sharply immediately following conversion, but since 1983 has more than doubled. Yet some say that indigent patients still feel unwelcome. Others said HMA served the indigent well, turning away no one. Some criticized replacing the old open-door policy with pre-admission deposits, but administrators said deposits are requested but never required, that the hospital is legally bound to treat all patients who present to the hospital and no patient is ever refused treatment.

Despite declining inpatient use, the scope of services increased at the hospital following conversion. HMA has added or expanded services since conversion, while dropping none. HMA also has attracted a number of new physician specialists to the area.

Cost. Prices are now higher than before conversion, but in recent years have become more competitive. Some individuals perceive prices to be unreasonably high. HMA also has a more businesslike attitude towards collections, which concerns some community members.

Quality. There are conflicting accounts of whether the conversion has resulted in better quality care. Some worry that tight staffing and constant turnover of management staff may be jeopardizing quality and adversely affecting morale. Based on emergency room use, several members of the community (who normally use another hospital) got negative impressions about Upstate's quality (some concerns relate to patient satisfaction--e.g., excessive waiting times). Those connected with the hospital tend to believe that improvements in the facility have attracted higher quality medical staff and improved the technical quality of care given. The hospital was Accredited with Commendation in JCAHO's latest (1996) review.

Public Health. The sale has produced no major change in city public health activities.

Economic Impact

Use of Conversion Proceeds. Cherokee County used the funds from the hospital lease/sale for health and non-health purposes. The proceeds were put into a segregated fund which, with interest, eventually grew to $8 million. This was more than enough to refurbish the old hospital to create Peachtree Centre without borrowing or higher taxes.

Staffing. There have been some reductions in staff following conversion but these might have occurred anyway. The hospital's occupancy rate has declined during the past decade resulting in some nursing staff reductions by attrition rather than layoffs.

Capital Investment. Capital investment has increased following conversion. Capital expenditures made since the conversion include $18 million for the new hospital and several major service expansions which stimulated several new specialists to move to the area.

Taxes. The hospital pays an estimated $1.8 million in annual taxes, of which the state gets $70,000 (until at least 2004, annual county property taxes of roughly $250,000 are credited against hospital indigent care expenses).

Net Assessment

This conversion appears to have resulted in a positive impact on community health due to improved odds of hospital survival, service expansions and a possible increase in quality. The net economic impact probably is positive. The community gained from the sale/lease proceeds, new capital investments, new physicians and new tax revenues, but these have been offset somewhat by staff reductions, higher prices and a lower daily census.