Two Jackson Hospital and Clinic leaders stepped down Tuesday amid efforts to reorganize the financially struggling institution in the Capital City.
Meanwhile, advocates for Medicaid expansion in Alabama are using the metro-area hospital’s instability to call on state leaders again to increase the number of those who could be covered by the insurance program for the low-income largely funded by federal dollars.
Jackson’s Chief Executive Officer Joe B. Riley and Chief Operating Officer Michael James have left the hospital and Ronald Dreskin, a partner with EisnerAmper’s Health Care Services Group, will serve as interim CEO, the hospital announced Tuesday.
“Both Joe and Michael have served with dedication and expertise, and I thank them both for their contributions,” said retired Brig. Gen. Edward Crowell, chair of the hospital’s board of directors. “This announcement is part of a restructuring initiative aimed at transforming the hospital into a focused clinical organization and restoring the hospital to financial stability. A restructuring-focused interim CEO, working alongside the chief restructuring officer, will provide strategic oversight and clarity of vision to quickly execute a turnaround while enabling other senior leaders to focus on the hospital’s day-to-day management.”
The hospital previously appointed Allen Wilen, a partner with Eisner Advisory Group, as its chief restructuring officer.
In September, Jackson’s bond rating had been lowered to a “D” after it defaulted on bond interest payments. The bondholder requested full payment after the hospital failed to make interest payments. The hospital’s liquidity, according to S&P, “is very thin and insufficient to meet the bondholders’ demand for full payment.”
The hospital cited high labor costs and inflation for missing the bond payment.
Dreskin will lead the hospital’s day-to-day operations, and Wilen will continue to lead its restructuring efforts and report directly to the hospital’s board.
According to the press release, next steps include a “divestiture of non-core operations,” including transferring operations of the Hospice of Montgomery service to an organization that specializes in hospice care and selling the 17,000-square foot fitness facility Jackson Wellness Center.
Officials have stressed that the hospital remains open and will continue to provide patient-centered and cost-effective care as it restructures.
With 344 beds, Jackson offers cardiac, cancer, neurosciences, orthopedics, and women’s and children’s care. It also has a 24-hour emergency department.
Billboard calls attention to hospital, Medicaid expansion
Medicaid expansion advocacy group Cover Alabama and the American Cancer Society Cancer Action Network this week unveiled a billboard on Interstate 85 near the hospital.
It says “Save Jackson Hospital. Expand Medicaid now.”
According to a report from the Center for Healthcare Quality and Payment Reform, more than half of Alabama’s 52 rural hospitals are at risk of closure, including 23 facing an immediate threat.
“For too long, Alabama’s hospitals have struggled under the weight of a broken healthcare system,” said Debbie Smith, Cover Alabama campaign director. “This billboard is a stark reminder that without action, more hospitals will be forced to close, impacting families and economies across our state.”
In a written statement about the billboard, Crowell, the hospital’s board chair, also called for Medicaid expansion.
“Jackson Hospital plays a vital role in ensuring that community members have access to essential health services,” Crowell said. “Medicaid expansion would be a game-changer, strengthening hospitals across the state and enabling us to continue serving those in need.”
Alabama is one of 10 states that has not expanded Medicaid. Earlier this year, some lawmakers were briefed on a proposal to use federal dollars to expand private health care coverage to low-income Alabamians. Republican leaders, including Ivey, have for years said they’re concerned about long-term costs associated with expansion.
About 300,000 uninsured Alabamians fall into a coverage gap, making too much to qualify for Medicaid but not enough to afford private insurance.
In 2022, a Public Affairs Research Council of Alabama report said expanding Medicaid would increase costs to the state by an average of $225.4 million per year above current Medicaid expenditures over the next six years. However, the state would also see estimated average annual savings of $397.8 million over those same six years.