Six months ago, Washington Regional Medical Center in Plymouth declared bankruptcy for the second time in five years. Now, hospital leadership hopes that the facility will emerge from this latest financial hardship by late May.
That’s good news to the 10,713 residents of Washington County who need the hospital to stay in business. It’s the only one around.
The bad news is that it has never been harder to keep a rural hospital afloat, especially one that’s not connected to a larger health system. In adjacent Martin County, Martin General Hospital closed its doors in 2023. Thirteen more counties in the northeastern region of the state don’t have hospitals at all.
Should Washington Regional get through this, it will serve as a rare example of a rural hospital taking control of its shaky finances and preserving essential services for North Carolinians.
The good doctor
When Washington Regional Medical Center filed for Chapter 11 bankruptcy, it owed millions to a long list of creditors.
Dominion Energy is due roughly $300,000. The Washington County Tax Office is asking for over $150,000. Washington Regional also owes money to General Electric as well as a number of vendors, including the company that handles the hospital’s pharmaceutical operations. The full list of creditors includes more than 70 companies and organizations.
Texas-based Affinity Health Partners purchased the Washington County hospital after a catastrophic 2019 bankruptcy that led to liquidation under its previous owners. But by the end of the year, patients were back on the hospital floor.
Washington County, one of the poorest areas in North Carolina, also hosts some of the highest rates of infant mortality and other adverse health conditions, such as obesity and heart disease.
That makes Washington Regional Medical Center, with its 25 beds, a lifeline in an otherwise barren health landscape. It’s why the facility is designated as a “critical access hospital” by the Centers for Medicare and Medicaid.
When neighboring Martin General Hospital closed, emergency room visitation at Washington Regional increased from 450 patients per month to over 600.
“The importance of the hospital cannot be overstated,” Plymouth Mayor Brian Roth told Carolina Public Press. “Especially since we’ve gotten all the patients who would have gone to Martin General.”
Washington Regional is ‘here to stay’
If Washington Regional did close, there’s not another alternative in the immediate area. Residents would have to drive many miles to reach hospitals in Windsor, Washington or Edenton.
Complicating matters, the flat, piney swampland on the Albemarle Sound is not easy to navigate, and public transit is pretty much nonexistent.
“We cannot lose the hospital here,” Roth said. “It just cannot happen.”
CEO Frank Avignone promises that it won’t.
“We used bankruptcy as a tool to reorganize our debt,” he explained. “We basically did it for one vendor who was giving us a hard time, and now that that is taken care of, the hospital is doing well. Patient volumes are up. We have a brand new CT scanner so we are increasing cardiac and pulmonary care. We have new doctors on staff. A new OB/GYN on staff. We’re not some fly-by-night community hospital being run by a crook using it as an ATM machine.
“The hospital is here to stay unless it burns to the ground.”
Washington Regional is not currently performing surgeries. Hospitals typically use specialty procedures as a way to generate revenue and offset the high costs of, say, operating an emergency room. The hope is that the hospital will renew surgical procedures at some point, adding a layer of financial security.
Meanwhile, another threat is looming: the $880 million cut to Medicaid currently being discussed by Republicans in Congress.
At Washington Regional Medical Center, 60% of patients are covered by Medicare or Medicaid, making the program a crucial source of funding for the hospital.
If that coverage goes away, the hospital’s finances may be thrown back into peril.
“We treat folks on Medicaid. That’s our population and that’s what we’re designed to do,” Avignone said. “We just have to balance the books. That’s what I’ve been trying to do — and it’s working.”
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