RMC purchase of Jacksonville hospital could have widespread, positive impact
by Patrick McCreless
Regional Medical Center’s recent purchase of Jacksonville’s hospital could mean improved services for local patients and increased competition among area providers, according to sources familiar with the deal.

The Anniston-based hospital announced late last week that it was buying Jacksonville Medical Center to expand its influence in the five-county region. RMC officials and health experts say the acquisition could mean improved quality care for more local rural patients. Experts also say the purchase could heat up competition between hospitals in Calhoun and Etowah counties.

RMC administrators say they began planning the acquisition approximately three years ago. Due to a signed confidentiality agreement, officials from both hospitals decline to disclose the purchase price for Jacksonville Medical, which will be officially renamed RMC Jacksonville in January.

David McCormack, Regional Medical Center CEO, said he expects improvement and expansion of services at Jacksonville hospital.

“We’re expecting growth, yes we are,” McCormack said.

McCormack also said that some RMC employees could be sent to Jacksonville to help in the changes. RMC’s chief operating officer Joe Weaver is already at Jacksonville Medical to head up the transition.

However, exactly what changes will occur at the hospital in the coming months are still unknown. McCormack said that due to the confidentiality agreement, his staff could not speak with any Jacksonville Medical staff about the hospital or even tour the facility until the purchase was announced.

“We’ve got a six-month transition process to go through,” McCormack said. “But from what I understand, the hospital is well-run and we’re hoping to continue that.”

Dale Quinney, executive director of the Alabama Rural Health Association, said the RMC purchase of a smaller, rural hospital, could be a good thing for the area.

“There’s a potential for this to be something good, something stabilizing and actually provide more sub-specialty care,” Quinney said.

McCormack noted that due to the purchase, the Jacksonville facility will join UAB Hospital’s Cancer Care Network, which RMC joined last year. Through the network, RMC gained part of a $15 million federal grant this year for improving cancer care services. The affiliation has also provided some RMC cancer patients with improved care through access to clinical trials normally available only at UAB.

“They will become a part of that, too,” McCormack said of Jacksonville joining the network.

Quinney said he expects RMC’s acquisition to help more rural patients the way similar purchases have helped other areas in the state in the past. He said DCH Health System in Tuscaloosa purchased a rural hospital in recent years, improving the lives of patients there.

“What they seem to do as a part of that acquisition is bring in specialists … it has wound up expanding health care in those areas,” Quinney said.

Rosemary Blackmon, executive vice president of the Alabama Hospital Association, agreed that the purchase could benefit more patients in the area with possibly better services and access to increased medical staff.

“They’ll be able to share some staff and some of their policies,” Blackmon said.

Gaining access to a larger patient base is paramount for RMC, which has seen Medicare and Medicaid reimbursements decline in recent years due mainly to the economy.

“In order for us to provide the services we’re providing, we need a big base of patients to do that,” McCormack said.

Blackmon said hospitals across the state are feeling the financial pinch due to drops in Medicare and Medicaid reimbursements.

“Hospitals are looking for ways to either partner and join with other hospitals to find efficiencies and share services … because of the margins being so tight,” Blackmon said.

But the attempt to bring in more patients through Jacksonville Medical could increase competition with other hospitals, particularly those in Etowah County, specifically Gadsden Regional Medical Center and Riverview Regional Medical Center.

“Currently, a lot of the people up there in Jacksonville go up to Gadsden,” McCormack said.

Jim Edmondson, CEO of Riverview, said about 7 percent of his hospital’s patients are from the Jacksonville area. He added that between 13 and 14 percent of the Jacksonville market make up Gadsden Regional’s patient load. Edmondson is familiar with the Jacksonville market due to his years as CEO of Jacksonville Medical. He left that job in October to work at Riverview.

Edmondson said he expects the purchase will increase competition between RMC and Gadsden Regional more than with his own hospital.

“It’ll probably have more of an impact on Gadsden Regional because it’s a more dominant player in the Jacksonville area,” Edmondson said.

Edmondson said RMC is just continuing a long-time trend in the health industry of expanding its service area to increase revenue.

“One of the most efficient strategies for the future is growing what you already have,” he said. “It makes a lot of sense to try and have a bigger and more permanent presence.”

As for Anniston’s other hospital, Stringfellow Memorial Hospital, administrators there are apparently not concerned about RMC’s recent acquisition.

“It is up to every hospital and health system to determine the actions that are in their best interest – our decision was to not pursue this hospital purchase because it did not fit with our long-term plans,” said Bryan McCauley, CEO of Stringfellow.

McCauley said Stringfellow’s expansion plans will help it acquire more patients. The hospital is working on a $7.3 million, 2,250-square foot expansion and renovation project that will include three new operating rooms. The project is scheduled for completion in the summer.

“We believe the expansion of our surgical services that will open in June 2013 is the best way for us to pursue our mission of delivering the very best healthcare service in Northeast Alabama and meeting our patients’ expectations of a great healthcare experience,” McCauley said.

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.

© 2012