Auditor: 6 rural public hospitals struggling in Mississippi

Six of the 19 rural, county-owned hospitals in Mississippi were in poor financial condition in the budget year that ended in June 2016, state Auditor Stacey Pickering said in a report Wednesday.

Posted: Dec 14, 2017 8:35 AM
Updated: Dec 14, 2017 11:25 PM

JACKSON, Miss. (AP) — Six of the 19 rural, county-owned hospitals in Mississippi were in poor financial condition in the budget year that ended in June 2016, state Auditor Stacey Pickering said in a report Wednesday.

The report says three of those listed in poor condition are in the Delta: Greenwood Leflore and Tallahatchie General hospitals, and North Sunflower Medical Center.

Two are in the northeastern part of the state: Tippah County Hospital and Magnolia Regional Health Center in Alcorn County. One, Franklin County Memorial Hospital, is in the southwest.

The report says two of the 19 rural, public hospitals were in excellent financial condition. They are Jasper General and Neshoba County General.

Three were in good financial condition, and eight were in fair condition.

"Our federal delegation — our congressmen, our senators — as well as our state Legislature, all need to know where our high-risk areas are when it comes to health care in the rural community," Pickering told reporters.

Since 2010, five rural public hospitals in Mississippi have closed.

Communities can be hit hard by a hospital closing, with loss of emergency services and primary care, Pickering said. The lack of a hospital can make job creation more difficult because executives want to develop companies where their employees have access to health care. A closing also wipes out hospital jobs and could force physicians or other health providers to move away, hurting the local tax base.

Mississippi has 113 hospitals, private and public. Pickering said his office used federal guidelines to define which of the county-owned hospitals are considered rural, and the 19 in the report are not leased or managed by any other entity.

The list of 19 includes OCH Regional Medical Center in Oktibbeha County. In a November election, local residents rejected a proposal to sell the 96-bed hospital. The auditor's report lists the hospital in fair financial condition.

For each of the 19 hospitals, the auditor's office evaluated profitability, the number of days of cash on hand, debt financing and the age of the facilities. Pickering said that since 2015, hospitals that participate in the Mississippi Public Employees Retirement System have had to list their pension obligations as part of their financial picture.

Statement from Magnolia Regional Health Center:

“In response to the assessment of public rural hospitals’ financials by the Office of the State Auditor, we feel like it is important to elaborate on the factors that contributed to Magnolia Regional Health Center’s “poor” financial rating for fiscal year 2016. The Office of the State Auditor based their review on audited financial statements that took into account the effects of regulations mandated by Governmental Accounting Standards Board 68 (GASB 68),” said Ronny Humes, Chief Executive Officer at Magnolia Regional Health Center. “These regulations were initiated in 2014, requiring public hospitals to record on their financials their portion of the unfunded liability of the Public Employees’ Retirement System (PERS). Although these liabilities appear on our financial statements, we have paid all of our contributions required by PERS . Removing the impact of GASB 68, our financial strength index score would reflect an “excellent” score for 2015 and a “good” score for 2016. The decline from fiscal year 2015 to fiscal year 2016 reflects a major IT upgrade the hospital underwent to better enhance the continuum of care for the patients we serve and to better compete in the changing healthcare arena. We are confident our current financial position will allow us to continue to provide care in Alcorn County and the surrounding region for years to come.”

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