The former Pioneer Community Hospital property on Jeb Stuart Highway has been sold again and Patrick County officials are seeking partnerships with other providers.
Foresight Health purchased the property in 2022 for $2.1 million and, earlier this month, sold it to Wolf of Wabash LLC for $1.6 million, according to records on file at the Patrick County Circuit Court Clerk’s Office. Both companies are based in Chicago.
Patrick County Administrator Beth Simms issued a news release Jan. 23 confirming that Foresight would not be reopening the hospital as planned and would be actively pursuing opportunities and partnerships with other health care providers.
Foresight Chief Operation Officer Joseph Hylak-Reinholtz did not respond to a request for comment. However, Cardinal News reported that Hylak-Reinholtz said in a March 19 email that Foresight plans to lease the property from the new owner and operate a behavioral health and drug abuse center out of the facility.
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Foresight officials have admitted they could not find a profitable business model for the rural facility as a traditional hospital, something that Pioneer Health Services of Mississippi learned when it closed the facility in 2017 and declared Pioneer Community Hospital of Patrick County bankrupt.
“Health care access was the top identified need in a 2019 community health needs assessment and improvement plan led by the Virginia Department of Health,” Board of Supervisors Chair Brandon Simmons said in a release on Jan. 23.
Healthy Patrick County, an advisory group established by the West Piedmont Health District in 2020, determined reopening the hospital would not be successful because the existing one would cost too much to repair and a new one would cost too much to build.
The problem in Patrick County is not unique. There have been 192 rural hospital closures and conversions nationwide since January 2005, according to The Cicil G. Sheps Center for Health Services Research at the University of North Carolina.
The 25-bed hospital in Patrick County is the only hospital in Virginia to close in the past 19 years. The Mountain View Regional Hospital, a 20-bed facility in Norton, was converted for other purposes in January 2020.
In neighboring North Carolina, eight rural hospitals have closed and four have been converted over the same period, according to the study.
Sovah Health in Martinsville is the nearest hospital serving Patrick County. The 220-bed facility provides staffing for 128 of those beds, according to Virginia Health Information (VHI), an organization formed in 1993 with the passage of the Patient Level Database System Act for the purpose of providing health data in Virginia.
For the fiscal year ending Dec. 31, 2022, the Martinsville hospital was profitable with a reported revenue of $127 million and expenses of $115.3 million for a operating profit of $11.7 million.
By comparison, when Pioneer closed the hospital in Patrick County, its last report showed $20.9 million in revenue, but a loss of $2.8 million.
VHI shows the total profit of Virginia’s hospitals in 2021 at more than $5.4 billion, up from $2.1 billion in the prior year. The gain was due, in part, to COVID-19 era subsidies.
In January 2023, the Centers for Medicare and Medicaid Services created a new Rural Emergency Hospitals (REH) designation for qualifying rural hospitals with 50 beds or less.
The designation allows a participating hospital to close inpatient beds that are rarely used in favor of providing emergency and outpatient care. In return, the facility receives an annual government subsidy of approximately $3.2 million a year and a 5% increase in Medicare reimbursement.
While the few hospitals that have opted for the designation report the change has allowed them to remain open, most facilities have not accepted the offer. Becker’s Hospital Review reported in November that only 16 hospitals in the country have converted to REHs.
“Rural hospital will have to try new strategies, start new services, adapt to the changing needs of patients,” Thomas Siemers, CEO of Wilbarger General Hospital in Vernon, Texas told Becker’s.
Said Simmons: “Now that we have confirmation that Foresight will not be opening a hospital in Patrick County, we can seek partnerships with other healthcare providers and look at home grown solutions.”