“You look at a small rural hospital today and ask how does it survive a constantly changing environment and meet the needs of the community. How does it survive?” posed Jan Unger, the president of Angel Medical’s board of directors. “It has to change.”
Angel simply could not survive financially as a standalone community hospital and inevitably succumbed to the national trend of small hospitals partnering up with larger ones.
Angel Medical Center started down the path of an affiliation with Mission more than two years ago.
Angel will remain its own entity, sort of. Angel was not sold nor merged with Mission. But it is joined at the hip, with Mission now overseeing and controlling Angel’s operations in exchange for the help it offers.
Angel still has to be self-sustaining financially. In other words, Mission won’t prop up its balance sheets.
But the affiliation brings financial benefits, according to Angel CEO and President Jim Bross.
Mission has guaranteed $16 million in outstanding debt for Angel, allowing Angel to reduce its interest rates. Mission will help Angel negotiate better reimbursement rates from insurance companies. Angel can get medical supplies and equipment more cheaply as part of Mission’s bulk buying network. And Mission is able to provide expert advice, training and consultant services for free that Angel would otherwise have had to pay for.
All those savings add up and are making a difference in Angel’s bottom line.
“We are cautiously optimistic we will be close to break even by the end of the year,” Bross said.
It’s an odd goal — to merely break even — but is not uncommon for small rural hospitals like Angel, with a daily average of 18 inpatients.
“That’s great to get to the break even point compared to where we have been the past five years,” Bross said.
There’s intangible benefits as well. For example, Angel’s 460 employees can look forward to better benefits as part of Mission’s network, which will help with employee recruitment and retention.
Mission has been well received by the community as a partner for Angel, according to Martin Wadewitz, the chief operations officer of Angel.
Angel has always had high patient satisfaction levels, perhaps due to its smaller size and thus more personal feel. But the Mission partnership will — and already has — meant clinical improvements, from better nurse training to patient tracking systems to care protocols, Wadewitz said.
Angel is now one of four smaller hospitals in Mission’s network — along with those in Transylvania, McDowell and Mitchell counties. The Highlands-Cashiers hospital is also in negotiations to join Mission.
Four years ago, Mission courted the trio of hospitals in Haywood, Jackson and Swain counties but was unsuccessful in forging an alliance. Mission could have another shot as MedWest hospitals are now contemplating whether to switch partners or even put their hospitals up for sale.
Mission CEO Ron Paulus said the motivation in taking smaller community hospitals under its wing is a benevolent one.
“People tend to doubt you when you say that, but it’s true,” Paulus said. “The reason we exist is to serve the communities of Western North Carolina.”
Critics of Mission have accused it of monopolistic forays and tactics to take over health care in WNC. But look around, Paulus said. Small rural hospitals aren’t exactly a financially lucrative proposition. Mission isn’t hindering competition but filling a void.
“Here it comes down to ‘Are there going to be services or are there not going to be services?’” Paulus said.
Combine that with the “challenging demographics” of the region — a higher number of patients without insurance and unable to pay their bills — and it is a struggle. That’s why banding together makes sense, Paulus said.