SoutheastHEALTH closing Reynolds County health center, clinics

SoutheastHEALTH has announced the closing of Southeast Health Center of Reynolds County and its related clinics in Ellington, Missouri, and Van Buren, Missouri. Operations will cease effective March 11.

According to a news release, SoutheastHEALTH recently was informed by state Medicaid officials of a $6 million liability owed by Advanced Healthcare, the hospital’s previous owners.

As the current owners of the facility, the law states SoutheastHEALTH is responsible for the liability.

When Southeast Health Center of Reynolds County was bought in 2013, Advanced Healthcare indemnified SoutheastHEALTH for previous liabilities.

Since that time, Advanced Healthcare has indicated it is unable to pay the debt as called for in the purchase agreement.

Despite the closure, SoutheastHEALTH system officials are touting the financial turnaround of the overall system over the last couple of years. The closing of the Reynolds County facility was not a desperate move, officials said; rather, it was closed because of the specific economics of the single entity. The closure would have been necessary even without the $6 million liability, but that complication may have hastened the decision.

“It was in the purchase agreement to indemnify it, but with their inability to pay, it doesn’t matter. It transfers over, and that’s where we’re at,” Shauna Hoffman, director of marketing at

SoutheastHEALTH, said.

“We understand that this won’t be an easy time for many patients, providers and staff,” Ken Bateman, SoutheastHEALTH’s president and chief executive officer said via news release. “However, we cannot compromise the financial strength of the entire health-care system by absorbing losses.”

The Reynolds County hospital is not viable regardless of the $6 million in liability owed, Bateman said. Since 2013, SoutheastHEALTH has absorbed more than $17 million in operating losses but managed to get $500,000 in the black for 2015 after an overhaul that eliminated many positions, including several executives, and renegotiated large contracts and services. In 2015, SoutheastHEALTH absorbed a $1.5 million loss from the facility in Reynolds County, officials said.

Bateman expressed a commitment to rural hospitals under the SoutheastHEALTH umbrella.

“I’d like to keep a commitment to those hospitals, but I cannot afford to go in excess of half-million on losses per year,” Bateman said. “I just don’t see how this facility (Southeast Health Center of Reynolds County) would ever come under that threshold.

“This isn’t about Southeast struggling and shutting the facility down. It’s just the economics of that facility.”

SoutheastHEALTH is working with facilities in Ripley and Stoddard counties to stay within the budget.

“We want to continue our commitment in the rural areas, but the economics have to work,” Bateman said.

The health-care system also is evaluating options for relocating employees to Missouri facilities in Doniphan, Dexter, Poplar Bluff and Cape Girardeau. SoutheastHEALTH will provide severance packages based on job tenure and performance to employees who cannot be relocated.

To assist transitioning patients, it is reaching out to local health-care resources and seeking local providers that can absorb these patients.

bbrown@semissourian.com

(573) 388-3630

Pertinent address:

Ellington, Mo.