Last night I read about David and Goliath (1 Samuel 17), one of the best-known stories of the Bible. Symbolically, this is the situation Jackson Hospital finds itself in today.
Before we took over the operation of Jackson Hospital, we completed thousands of hours of due diligence. Our conclusion? It was simply too big a task. Every one of the other 198 companies solicited by the hospital made the same determination. But the governor came back to us and suggested the state and potentially others could participate. What would it take?
We went back and developed a plan. If the state, county and city participated, if we could get private financial support, and if our commercial payers joined in, it absolutely could work. We presented our plan to all parties. The local and state governments committed cash grants, and Jackson Investment Group offered $75 million in private financing. Given this strong show of support, we came in and took over the operation in November 2025.
Our first task was to get the remaining piece in place to make our plan viable. Blue Cross Blue Shield of Alabama (BCBSAL) had to pay us fair rates, equal to what they pay Baptist South, to make the plan work. We’ve interacted with BCBS in other states where they are powerful, though not nearly so powerful as they are in Alabama, and we knew it would be a challenge to get them on board. But given the logic of our argument, the compelling need to save this vital hospital, and the broad public and political support, we expected they’d join in. If they didn’t, Jackson Hospital would close, creating a regional healthcare calamity, overwhelming other local hospitals, and BCBSAL would end up paying the higher Baptist rates anyway. Surely, they’d pay Jackson fairly to prevent its closure.
We underestimated them. They’re used to getting their way. Second largest in terms of government relations spending, BCBSAL exerts tremendous influence across the state. Their annual revenue exceeds $4 billion, total assets are $6.2 billion, and they have surplus reserves of $3.6 billion.
Our challenge was to overcome the corporate arrogance associated with unchecked power.
Blue Cross says they’re protecting their customers from higher prices. But there’s no need to involve customers. They can save Jackson Hospital with one month of interest on their reserves.
Blue Cross says they’ve increased reimbursement rates to Jackson Hospital, especially over the last few years. This is true, but Jackson Hospital finds itself today still 70% behind a local hospital with similar services. Imagine how great the difference was before BCBS started increasing Jackson's rate! In fact, the recent BCBSAL rate increases could be likened to children realizing the mess they’ve made and saying, “Lets hurry and clean it up before Mom and Dad find out.”
They say this is not their problem to solve and that Jackson Hospital has had financial difficulty for years. True, Jackson Hospital has struggled, and prior management made mistakes. Their biggest mistake was not recognizing their low BCBSAL rates would never sustain the hospital and that by adding services they were only digging the hole deeper. It is the height of hypocrisy for BCBSAL to now say, “It’s not our fault.” The BCBSAL rates to Jackson Hospital are not fair, and they never have been.
They say Baptist South is a bigger hospital with more advanced services and it provides better care. Yes, Baptist South has grown and added services. That’s not so hard to do when you’re reimbursed fairly. Jackson Hospital, which for years had the only open-heart surgery program in the region, has lost physicians and closed services as its financial means dwindled. Yet Jackson Hospital continues providing excellent care to its patients, arguably better than Baptist Hospital South which in 2025 was rated in the lowest categories for safety, quality and service by the Leapfrog Group and by the Centers for Medicare and Medicaid Services (CMS).
Blue Cross says they represent less than 20% of Jackson’s revenue. How can this be their fault? The truth is, BCBSAL represents 29% of Jackson Hospital’s net revenue. Hospitals see patients in four financial categories, Medicare, Medicaid, uncompensated, and commercially insured. As BCBSAL knows, hospitals lose money on the first three and rely on commercial insurance to cover those losses and provide the financial wherewithal to reinvest in infrastructure, equipment and service expansion. In Alabama, where BCBS has a virtual monopoly (85% of the commercial market), commercial insurance means them. An Alabama hospital’s success, often its survival, depends on those BCBS rates. With fair reimbursement, a hospital, like Baptist South, can prosper. Without them, a hospital will die.
If BCBSAL doesn’t agree to pay Jackson Hospital fairly, this hospital will die. This was our board’s determination after reviewing hospital financial statements at its June 2 meeting. Blue Cross has said repeatedly in court that we are “crying wolf,” that we can “snap our fingers and make this go away.” We wish this were true. The board directed us to announce on June 25 that we will begin closing on July 1 if BCBSAL doesn’t agree to pay us fairly before that date.
We’ve failed to overcome Goliath’s arrogance. The last pebble in our sling is with the courts and our government leaders. Our prayer is that with their help, that pebble will strike home, and Jackson Hospital will survive.
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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