Small town Mississippi hospital at crossroads with new owners

Published 7:01 am Saturday, April 20, 2019

When the hospital in rural Panola County, Mississippi, went into bankruptcy in August, residents had good reason to worry.

Half of the state’s rural hospitals have been deemed at financial risk. Others have stopped crucial services, such as closing an emergency room. Five rural hospitals have closed in Mississippi since 2013.

The hospital in Batesville has been through a medical fraud scandal, a 2009 bankruptcy and a string of owners. Some residents feared the whole hospital could be shuttered. The effects would have been devastating for the town of about 7,000.

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Nearly 400 people — doctors, nurses, administrators and staff — would lose their jobs.

The community would struggle to lure businesses if there wasn’t affordable health care nearby.

Worst of all, residents would die if they didn’t reach a hospital quickly enough.

Local officials were eager to keep the lights on, but could do little more than wait for a bid in bankruptcy court.

With 15 minutes to spare, an initial bid was made on the deadline day. Four partners bought the hospital for $2.5 million, less than a tenth of what it sold for about 15 years earlier, $27.3 million.

A month into ownership, the group is making plans to grow the hospital.

Five years ago, Quentin Whitwell was a lawyer and a second-term city councilman in Mississippi’s capital city, Jackson. He met with a life planner who encouraged Whitwell to ask himself questions like, “How do you find peace in your vocation?”

Whitwell resigned from city council, moved back to the Oxford area where his family goes back generations, and became the legal counsel and chief operating officer for Alliance HeathCare System.

He watched as Curae Health bought three Mississippi hospitals — in Amory, Clarksdale and Batesville — in 2017 and declared bankruptcy a year later.

During the bankruptcy process, Whitwell said Curae’s CEO contacted him about purchasing a hospital.

“Rural health care has never been more needed,” Whitwell said. “Rural health care is where most people are running from.”

Curae never bothered to change the signs at the hospital in Panola County, which until recently still said Merit Health, the prior owner.

The main hospital facility in Batesville was relatively new, having been built in 2004. It has a good location, just off I-55 and in between Memphis, Tennessee, and Jackson, Mississippi.

He said Panola County needs the hospital to stay open.

“You do not have an emergency room within 30 miles north, south, east or west,” Whitwell said.

Whitwell had been talking about buying a hospital with his boss, Dr. Kenneth Williams, who owns Alliance HealthCare System, and they were put in touch with Vizion Health, a relatively new company formed by veterans of the health care industry.

The next step was to go to bankruptcy proceedings in Nashville. Their bid was accepted by a committee of creditors.

Whitwell, Williams, Vizion Health and a Tennessee businessman came together as roughly equal partners to buy the hospital, Whitwell said.

Williams oversees the emergency room and doctor-to-doctor relations. Vizion Health runs the psychiatric campus of the hospital. Java Medical Group runs the main campus. Whitwell, as chairman of the board, makes sure everything runs smoothly.

Curae had sold the property where the west campus sits and had been renting the property, Whitwell said. There was also the $6.5 million owed to vendors. Whitwell said attorneys were able to negotiate $6.5 million down to about $500,000.

During the purchasing process, Whitwell was invited to a meeting with Batesville Mayor Jerry Autrey, who had misgivings about the hospital’s former owner and wanted to make sure this time was different. Autrey didn’t tell Whitwell other officials would be there, too.

“They intensely grilled me about every possible scenario in which a rumor or anything else had ever come,” Whitwell said.

Joe Azar, executive director of the Panola Partnership, an economic development group, was also at the meeting. He said he wanted to know more about their vision for the hospital.

“Are they buying it just to flip it? Or are they buying to be a long-term partner?” Azar recalled asking. “It was a pretty brutal meeting. … No one held back.”

Whitwell said he addressed every point.

One challenge facing the hospital is dwindling reimbursements from Medicaid, Medicare and private insurance providers, Whitwell said.

“We’re expected to do more with less,” he said.

The ownership has both short-term and long-term goals to increase revenue, Whitwell said, including increasing outpatient services.

Whitwell said he wants to have physical therapy at the hospital. Next, owners plan on branching into wellness and increasing preventative health services. That means more check-ups and visits for mammograms or colonoscopies, Whitwell said, which are often covered by government and private health insurance.

They would like to expand the wound clinic at the hospital by bringing in a surgeon, Whitwell said, as well as set up an ambitious telemedicine service.

Ashoke “Bappa” Mukherji, one of the ownership partners, grew up in McMinnville, Tennessee, where his father was the town surgeon. Mukherji said people would tell him his father saved their life or the life of someone they knew. Mukherji, now a businessman, said he never forgot the importance of a hospital to its community.

In 2017, his company Java Medical Group bought a hospital in Lakeville, Alabama, that was slated to close. He said he worked with the city and county to create health care authority that bought the hospital back, and now his company manages it.

Gaines Baker has been practicing law in Batesville for nearly 30 years. He watched as the hospital dipped into bankruptcy and wondered if it would close. Like other rural towns, Batesville has struggled, he said, and keeping the hospital open is key to attracting business.

“I can’t say enough about the impact of losing this hospital,” Baker said. “It would have been traumatic.”