Georgia hospital on brink of insolvency after car dealership takes over operations

Dealership's owner received excessive compensation, according to audit
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A small hospital in Georgia turned over its management to a local car dealership eight years ago. Now it's on the edge of bankruptcy, the Atlanta Journal-Constitution has reported.

Jimmy Childre, the owner of the car dealership and until recently the CEO of Washington County Regional Medical Center, earned $480,000 a year in consulting fees after he took the post in 2008--triple to quadruple the pay of the previous CEOs. A recent audit said the pay was excessive, according to the Journal-Constitution. Another handful of consultants were paid about $2.2 million over the years.

The article noted that Washington County is a rural hospital, the type of acute care facility that has seen hard times in both Georgia and other parts of the country. In 2013, as many as a dozen rural hospitals across Georgia were at risk of closing. However, it appears none of the other facilities have had a management structure as unique as Washington County's.

Georgia Gov. Nathan Deal has made a number of proposals to resolve the rural healthcare crisis, including the creation of an holistic hub-and-spoke system to try and keep five of the most distressed facilities in business, and step-down hospitals that would be less expensive to operate, and even standalone emergency rooms.

Clinicians interviewed by the newspaper said the consultants cut clinical staff, leaving some remaining nurses to take care of as many as a dozen patients at a time.

"Local politics and good hospital governance do not mix," James Orlikoff, a healthcare governance expert told the Journal-Constitution. "The notion that a businessman or businesswoman, no matter how accomplished outside of healthcare, can come in and effectively run a hospital is nonsense. I have seen it done, and in the vast majority of situations, it results in a failure."

To learn more:
- read the Journal-Constitution article

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