New plan could save distressed rural hospitals from closure

Posted: 7:37 PM, Jan 23, 2019
Updated: 2019-01-23 20:41:40-05

WAVERLY, Tenn. (WTVF) — A new plan to save distressed hospitals would create incentives for investments in rural areas in Tennessee.

Belmont University professor Kelvin Ault and Attorney Russell Gill believe they have the answer to Tennessee's healthcare crisis. According to Ault, it starts with creating tax incentives for both not-for-profit and for profit investors.

"To the extent you make your state more enticing for for profit healthcare companies, you're actually going to raise your tax base," said Ault in and interview Wednesday morning.

Ault said you can increase interest in the hospitals by creating laws that exempt distressed or under-served areas from paying sales tax on medical equipment. He said it's a method that's worked in other states and can not only help in rural counties, but in distressed urban hospitals as well.

"If you buy high dollar equipment there, you would be paying sales tax on it. But not under our plan, if it's in a medically under served area or qualified area, according to the federal government. What does that do, it drives investment in those areas, in those hospitals which otherwise would never exist," said Gill. Gill was born in raised in Waverly, TN. He said the local hospital there, Three Rivers Hospital could benefit from the program.

The Vice Chairman of the hospital board, Daniel Collier, agrees.

"You're in a rural area. So, any business is always a struggle to get people to come in," said Collier.

According to Collier, there has been no set plan offered to Three Rivers that could get them out of their financial hole. He said the hospital board is open to any ideas.

He said, so far, they've just been able to stay afloat financially.

"You tighten your belt," he said. "You ask for help. Our local physicians have really really stepped up and helped with admitting more patients into their hospital, which all have gone a long way, but simply not enough at this point."

The plan to save hospitals doesn't end with incentives. Ault believes that a restructuring of hospital facilities could help increase foot traffic and create new forms of income for medical facilities.

"The idea is, these, we would take the existing facilities, still offer core services, healthcare services, but we need to supplement that with mental health services, Wellness services," said Ault. "I think we need to have sort of a community center there."

Governor Bill Lee has said one of his top priorities is rural healthcare. Gill said he believes this plan falls in line with the governor's plans.