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On Monday, a bipartisan coalition of Alabama state legislators released a statement in support of saving Jackson Hospital and Clinic in Montgomery, which is facing imminent closure after defaulting on $60 million in debt in September last year.
Last week, Jackson Hospital employees held a rally and press conference where they asked the City of Montgomery for a $20.5 million guarantee on a loan in order to keep the hospital open until they are able to properly restructure its finances. The city ultimately declined to extend that guarantee, leading to the hospital filing for Chapter 11 bankruptcy on Tuesday.
“This action will enable the Hospital to reorganize operations and implement a financial restructuring through a court-supervised proceeding while continuing to provide world-class patient care,” the hospital’s Chief Restructuring Officer Allen Wilen said of the Chapter 11 filing. “We have been serving the community for nearly 80 years and look forward to continuing to deliver excellence in personal healthcare far into the future. While we have taken important steps to strengthen leadership, enhance revenue, and better manage costs and liquidity, we are operating in what continues to be an extremely challenging environment. Bankruptcy is never an easy decision. However, it is the best path forward for the Hospital’s stakeholders as we focus resources on continuing to operate.”
In an official press release, the hospital announced that it has received a commitment for debtor-in-possession financing from third-party Jackson Investment Group LLC to facilitate the bankruptcy process.
“Following court approval, the DIP financing and cash generated from the Hospital’s ongoing operations are expected to support the Debtors,” reads the official statement. “With a strong reputation and world-class clinical expertise, the Hospital remains confident in its ability to deliver value for the benefit of its patients and communities and to emerge as a stronger organization.”
In addition to the efforts of the hospital’s own personnel, State Representatives Penni McClammy, Phillip Ensler, Kelvin Lawrence, Kenyatte Hassell, Chris Sells, Reed Ingram, Anthony Daniels and State Senators Kirk Hatcher, Will Barfoot, and Bobby Singleton are speaking up on behalf of Jackson Hospital.
“Bipartisan members of the Montgomery Legislative Delegation and the Minority Senate and House leaders have been in communication to try and help Jackson Hospital stay open. Jackson Hospital is an immensely important institution that we must keep from closing,” reads the legislators’ official statement.
“The consequences of closure would be far-reaching and devastating. The region does not have enough hospital beds to serve all of those in need of medical care. Wait times at surrounding emergency rooms will increase exponentially. There will not be enough medical care to treat everyone in need. This is a matter of life or death,” the statement continues. “The hospital serves not only residents in the city, but also in the county, surrounding cities and counties and even farther beyond.”
The lawmakers also highlighted the economic benefits generated by the hospital, calling Jackson an “economic engine” that employs thousands of workers in addition to providing numerous local vendors and businesses with contracts. They went on to stress that Jackson Hospital’s closure would not only be a harm to Montgomery, but to the state as a whole.
“Numerous cities and counties — urban, suburban, and rural — would be affected by Jackson hospital’s closing. 40 percent of patients at Jackson Hospital reside outside of the City of Montgomery. People’s lives and health are on the line. There is nothing more important than saving lives and taking care of people’s health,” the statement reads. “Therefore, we should all do our part to keep Jackson Hospital open. This responsibility should not just fall on the City of Montgomery. Cities and counties whose residents are served by Jackson Hospital should step up to help as well.”
Insufficient Medicare and Medicaid reimbursements, high uninsured rates, and a lack of Medicaid expansion have all resulted in more and more rural hospitals closing in Alabama and a reduction in Alabamians’ access to quality healthcare across the state. In their statement, the lawmakers pointed to this reality as further motivation for saving Jackson from closure: “As more and more hospitals close throughout Alabama, we must step up to ensure access to quality, affordable health care for all. As more rural hospitals close, more Alabamians are increasingly turning to urban hospitals like Jackson.”
Jackson’s spokespeople also cited the state’s refusal to expand Medicaid as one of the key factors behind the hospital’s current financial struggles.
“Without Medicaid expansion in Alabama, the Hospital suffers significant financial losses due to its care for uninsured individuals. In 2023 alone, gross charges related to the care of uninsured patients exceeded $45 million,” the statement reads.
“Increased labor costs, stagnant reimbursement rates, a challenging payor mix, and fallout from COVID-19” were also highlighted as burdens on the hospital’s finances.
“As state lawmakers, we support helping Jackson Hospital stay open long-term. There must be strong oversight in which Jackson must continue to provide a robust sustainability and accountability plan. Together, we can ensure continued access to health care and good jobs for Alabamians. We must save Jackson Hospital,” the lawmakers concluded in their statement.
