Jackson Hospital is dying. And one company has the power to save it.
For nearly a year, physicians, nurses, employees, community leaders, state and local officials, and Jackson Investment Group fought to keep this hospital alive. When no buyer existed and no easy answer presented itself, Jackson Investment Group stepped forward, loaning $25 million to keep the doors open while we pursued a sale and searched for a path forward.
We contacted hundreds of potential hospital operators. We conducted thousands of hours of due diligence. By June, the conclusion was inescapable: no buyer was prepared to make the investment required to turn Jackson Hospital around.
Then the governor's office asked what it would take to save this hospital. So we went back to work.
The recovery plan we built is comprehensive: new leadership, disciplined cost reductions, physician recruitment, service-line growth, public support, and private financing. But it has one essential requirement: fair reimbursement from Blue Cross and Blue Shield of Alabama.
That is the heart of this crisis.
What We're Asking For
Jackson Hospital is not asking for special treatment. We are asking Blue Cross to pay us the same rates it already pays Baptist Medical Center South – a hospital located three miles away.
Blue Cross pays Baptist South significantly higher rates than it pays us. Our analysis shows that comparable reimbursement, combined with the operational changes already underway, would allow this hospital to stabilize and survive.
Blue Cross has refused, despite appeals from hospital leadership, from the governor's office, and from numerous local, state and federal officials. It has refused knowing what closure would mean for Montgomery. It has refused knowing that legal remedies, even if pursued successfully, may come too late to matter.
Why Reimbursement Rates Are Life and Death
To understand why this refusal is so consequential, consider how hospitals actually stay afloat.
Most hospital patients are covered by Medicare, Medicaid, or no insurance at all. Hospitals lose money caring for these patients. Commercial insurance payments make up for these losses. They fund the investments in facilities, technology, equipment and staffing that keep a hospital viable. Though commercial insurance patients may represent only about a quarter of patient volume, those reimbursements are often the only thing separating a stable hospital from one in crisis.
When the dominant commercial insurer pays one hospital fairly and another hospital three miles away far less, that isn't just a business problem. It becomes a public health emergency.
What Closure Would Mean
If Jackson Hospital closes, the consequences will be immediate and severe.
More than 71,000 patients will need new physicians. Half a million prescriptions will need to be written by someone else. More than 50,000 emergency room patients each year will be pushed to other facilities. Already-strained ERs will be overwhelmed. Ambulance services will buckle and ambulance response times will become dangerously extended. Surgical patients, expectant mothers, Medicaid recipients, and families who depend on Jackson Hospital will be forced into a healthcare system with no room to absorb them.
Montgomery would lose jobs, access, and capacity, and according to a University of Alabama report, the region could lose hundreds of millions of dollars in economic impact.
This is not theoretical. This is not years away. Without immediate action, Jackson Hospital will close within weeks.
The Company That Can Stop It
Blue Cross and Blue Shield of Alabama controls approximately 85% of the commercial insurance market in this state. The American Medical Association has identified Alabama as having the least competitive commercial insurance market in the country. That is not a coincidence, it is the result of concentrated, unchecked market power.
With that power comes responsibility.
Jackson Investment Group has done everything private capital can do. It provided the original $25 million lifeline. It increased its commitment to $35 million when state, county and city leaders showed support. It helped build the recovery plan, supported leadership changes, and funded the fight to keep this hospital open. It has carried far more than its share of the burden.
But private capital alone cannot fix a broken reimbursement system propped up by a monopoly insurer which benefits from this arrangement.
The plan exists. The hospital can be saved. The solution is straightforward.
Blue Cross must pay Jackson Hospital the same fair rates it already pays Baptist South – rates that reflect the care we provide, the community we serve, and the mission we carry.
If Jackson Hospital closes, patients will go to Baptist where they will encounter the chaos of an overburdened hospital and where BCBS will pay the higher rates anyway. So why not pay those rates to Jackson and prevent what will be a local and regional healthcare calamity?
If Blue Cross refuses, the people of Montgomery deserve a clear and honest answer: Why was their hospital allowed to close when one company had the power – and the responsibility – to prevent it?
John Quinlivan is the CEO of Jackson Hospital.
The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to [email protected].
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