CLAXTON — Walking the halls of Evans Memorial Hospital is like walking through different decades, each marked by the building style of that time.

But without significant public investment, the 55-year-old nonprofit facility could be in its last decade of operation as an aging population brings in fewer dollars that state funding has failed to make up.

As Evans County residents have grown older, and in many cases poorer, more and more patients are being treated through Medicare and Medicaid leaving Evans Memorial with a widening gap previously filled by customers using private insurance.

Last month, Evans Memorial Hospital sent a startling letter to county commissioners that it can “no longer continue to operate.”

Hospital closures have devastated rural communities across Georgia. More than 100 rural hospitals have closed across the country since 2010 — seven of those in Georgia, according to the University of North Carolina’s Sheps Center.

Struggling to survive, hospitals shrink staff and services — most commonly doing away with labor and delivery units which health care leaders say has contributed to the state’s high maternal mortality rates. Evans Memorial lost its labor unit in 2008.

The state’s rural hospital tax program, a dollar-for-dollar tax incentive meant to alleviate just these issues, doled out less and less money, critics saying the program doesn’t help the hospitals that need it the most.

In an emotional meeting of the Evans County Board of Commissioners meeting on March 5, commissioners had to decide to continue to float the hospital with an increase in property taxes or risk the hospital’s closure.

That’s in addition to millions the county has poured into the hospital since 2006 to keep it running.

With some residents opposed to lending more money — firmly against a rise in property tax — and others in support — older residents unsure what emergency health care they’ll need in the future — commissioners were left unsure how to shoulder the burden.

But hospital staff warned if Evans Memorial closes, the effects will be felt throughout the community and the 170 people employed at the hospital will lose their jobs.

“It’s going to be the downfall of the county,” Lisa Ryles, the hospital’s director of business development said.

Evans Memorial is not alone in its struggle to survive. A study from Navigent, an industry consulting group, reported as of last February, 26 rural hospitals in Georgia were at “high financial risk” of closing. That’s almost half of the state’s hospitals that serve rural communities.

The study further concluded that when a community loses its hospital, per capita income falls and unemployment rates rise.

No new industry

The Southern Georgia town is dubbed the ‘Fruitcake Capital of the World.’ Bakeries in the area have been churning out the classic holiday dish for more than a century.

Much of Claxton doesn’t look like it has changed since the industry started. The Savannah and Western Railroad tracks run through Main Street and some buildings date back to the early 1900s.

Claxton’s population has seen a steady decline over the years, but has remained in the 2,000s since 1990, according to U.S. Census data.

Evans Memorial’s patients make up a majority of the town — older citizens, low-income patients covered by Medicare and indigent. For this reason, the hospital has increased efforts to draw patients from surrounding areas.

About 75% of the patients the hospital serves are on Medicare or Medicaid or have no insurance at all. Right now, because of the payor mix, the hospital is collecting 19.5 cents on the dollar, John Wiggins, CFO said.

“It’s just Evans County…” he said. “There’s not any new industry moving in. We’re not getting a lot of the younger population with families that have commercial insurance.”

Of the $51 million in revenue generated by the hospital last year, the facility only saw $10 million back in reimbursements. The problem is such that the hospital could only run for a week if the money stopped coming in.

“We’ve been running on under 10 days cash-on-hand for the past year,” Wiggins said.

The rural town isn’t drawing new populations adding to the stress of keeping the hospital afloat. But hospital staff and supporters said taking the hospital away is removing an incentive for industries to come to Claxton at all.

“I hope everyone realizes that if we don’t have a hospital here,” Star Harris, Claxton resident told county commissioners. “There will not be a single industry looking at Evans County. It’s not going to happen. The ones we have will probably not be here either.”

There are a few other hospitals in surrounding counties, but Evans Memorial often acts as a first stop to stabilize patients so they can make a long trip.

“It’s not only about those middle aged people that can get in their car, it’s no big deal to drive 15 miles down the road,” Nikki NeSmith, CEO of the hospital, said. “We have to think about everybody here. That’s really what we’re trying to do is we’re just trying to spread the word of the importance of rural health care, and that’s a hard thing to do.”

‘How do you become the neediest hospital?’

In 2018, the first year Georgia’s rural hospital tax credit program went into effect, Evans Memorial saw more than $800,000 in tax credit donations which went toward mainly new revenue-generating services like digital radiology equipment and merit-based raises. In 2017, the hospital received about $623,000 in funds that went toward gastroenterology and new ultrasound equipment.

But the number has slowly dropped to less than $245,000 last year.

Evans Memorial is on the state’s list of eligible neediest hospitals for the tax credit, but has slowly moved down in the rankings overtime causing compensation through the program to fall three-fold.

State auditors point to flaws in the program sending funds to hospitals that are more well off.

“We continually get moved down on that list we’re not sure exactly why,” NeSmith said. “I think everybody’s trying to figure out how you become the neediest hospital. There are hospitals that are part of the health system that are higher up on the list than us and we’re just here on our own.”

Under the program, money goes to the top neediest hospital until they reach a $4 million cap then the money trickles down. However, the program is capped in total at $60 million, so hospitals near the end of the list see the least support.

It seems like larger hospitals in more populated areas or that have more support, NeSmith said, are getting more funds than small, rural, independent hospitals.

According to the Center for Public Health at Georgia Southern University, in 2018, one-third of rural hospital tax credit funds went to hospitals that are affiliated with health systems.

The rural hospital tax credit has come under fire after a state audit found that funds weren’t always going to the neediest hospitals.

The program allows individuals or businesses to donate to any of the hospitals eligible in return for a 100% tax break. But the way the system was set up, the audit found, has caused problems.

All the hospitals on the list saw some money, but the program has not weighted the money towards the hospitals most in need.

A federal loophole allowed donors to actually make money off of the credit, but since that was discovered and closed, donations have dwindled.

“I don’t understand how these big, beautiful hospitals are in the same category as us,” Ryles said.

When asked about the negative audit of the program in January, Lt. Gov. Geoff Duncan, who championed the legislation as a lawmaker, said there’s room for improvement.

“The rural hospital tax credit program is designed to allow donors a choice on how to give — either by designated donations or unspecified donations,” Duncan said in a statement to CNHI. “The rankings are needs-based and the ranking methodology is not yet ideal but I stand by the focus of alleviating the financial struggles of rural hospitals. Evans Memorial Hospital is a great steward of public generosity over the years and I am committed to work on legislation that will benefit our rural communities.”

But Evans Memorial administration said getting local community members to understand and invest in the credit program has been a challenge.

“It’s really hard to get that information out to the citizens of this county,” NeSmith said.

Community divided

The Hospital Authority and Hospital Board requested a million dollars from the county to survive.

But commissioners were quick to point out the county has been floating the facility for a long time. In 2006, the Hospital Authority borrowed a little over $7 million through the issuance of a bond. But in 2015, the authority notified the commissioners it did not have sufficient funds to continue payments. Since then, the county has been paying on the bond, which still has an outstanding balance of about $4.8 million.

The county has also supported the hospital through multiple additional funding channels.

The hospital was also selected in 2018 as one of four hospitals to receive $750,000 through the Rural Hospital Stabilization grant.

“The Evans County Board of Commissioners sympathizes with the financial struggles of the hospital,” County Commissioner Jill Griffin read from a statement. “As many of you know, rural hospitals across our state and nation are experiencing these very same struggles. Many hospitals have closed for these reasons and many are on the brink of closure.”

The Evans County Courtroom annex was overflowing with people during the public forum on whether or not to lend the hospital more funds.

Supporters wore t-shirts that read ‘Save a hospital, save a life.” Worried employees asked if they’d have a job if the commissioners voted no. Angry land owners decried a rise in property taxes.

Hospital administration couldn’t give an answer to the biggest question: if things continued this way, when would the hospital likely close?

It’s impossible to say, NeSmith said. A hospital can’t predict how many visits it will have or what the insurance coverage of those visits will have.

The hospital has no reserves or emergency funds to fall back on, Wiggins said, if Medicare reimbursements get held up or something happens to the facility — the hospital wouldn’t make it.

But when did the County Commissioners become a “loan company?” Robert Hodgson, Claxton resident, asked.

“Every year, we have given them money and we keep giving them money. It’s got to stop. It’s not fair to the seniors on a fixed income. It’s not fair to the farmers….” he said. “You are the keepers of our money and we trust that you spend it right.”

Others demanded lowering hospital administration’s “extravagant” salaries.

Dr. Jesse Scott, chairman of the Hospital Authority jumped to NeSmith and Wiggins defense. They “inherited what they have,” he said.

Last year the state legislature required nonprofit hospitals to report their finances on their website. NeSmith, acting as both the hospital’s CEO and chief nursing officer, made $154,000 in salary and benefits compared to starting salaries of other Georgia CEO’s that made millions.

Some offered the idea of raising sales tax, but the state sets a limit on sales tax at 8% — which the County has already maxed out.

Older residents weighed the impact that the closed hospital would have on their health. Would they make it to another hospital in an emergency? Would their loved ones?

“I am in favor of saving the hospital by whatever means possible…” Holly Hutto, a Claxton resident, said. ”I would rather know that by me paying more taxes could potentially save someone’s life, it could be my parents or someone I don’t even know. I would much rather live with that option than voting ‘no,’ not to save our hospital and hear someone lost their parent, spouse, or child trying to make it one of the outlying hospitals.”

The Evans County Board of Commissioners voted 3 to 2 to infuse tax dollars into the hospital — but at a price.

A private donor agreed to match the county $50,000 a month for six months, in that time the hospital is required to do their best to find a purchaser.

After six months, Griffin said, there will be no more additional funding.

“We’re going to try,” County Commissioner Irene Burley said. “We’re going to see how these six months go.”

The short lifeline isn’t going to be enough time to find someone to buy the hospital, NeSmith said.

“But it’ll get us through the tough times,” she said.