GRANDVIEW AT A GLANCE
• Location: 1000 Highway 28 Jasper, Tenn.
• Size: More than 100,000 square feet
• Number of patients: Approximately 59,000 visits a year, including emergency, inpatient and outpatient visits
• Number of employees: 251
• Number of physicians: 100
Source: Capella Healthcare
Grandview Medical Center is familiar territory to Parkridge Health System.
A decade ago, the rural hospital in Jasper, Tenn., was part of Parkridge's parent company, HCA Healthcare, before the corporation sold it in 2005.
But that was during a different time, and under very different circumstances in the health care industry.
On Tuesday, HCA announced it will purchase the 70-bed hospital back from Franklin, Tenn.-based Capella Healthcare as Parkridge Health System extends its reach outside of the Chattanooga metro area.
The sale, which will be finalized by March, will add a fifth campus to the Parkridge network and solidify its presence as a regional provider.
Terms of the agreement were not disclosed.
Grandview overlooks the intersection of Tennessee Highway 28 and Interstate 24, and draws patients from counties in nearby Alabama and Georgia, as well as Tennessee.
But it also stands at a crossroads in the changing health care landscape.
Such changes are forcing small rural hospitals to rethink how to stay viable, and motivating large health care corporations to form more strategic hospital networks.
Nearly a decade ago, HCA was unloading rural hospitals instead of investing in them. In a 2005 news release, the corporation announced Grandview was among 10 rural or small urban properties it was divesting, "in contrast to the majority of the company's remaining hospitals which are located in large urban or suburban markets."
Capella officials said Tuesday the company is proud of what it accomplished at Grandview during its near-decade of ownership: adding physicians, expanding services and receiving recognition for quality.
But in what they called "the single most transformative time in the health care industry in decades," it no longer makes sense for Grandview to continue operating as a stand-alone hospital, said Mark Medley, president of hospital operations for Capella.
"Hospitals are really looking toward regionalization now. Patient care takes place in individual communities, but any way you can go about scaling that delivery of care on a regional basis helps you to lower the cost of care," said Medley, who is also chair-elect of the Tennessee Hospital Association.
"Because Grandview was an isolated facility for us, we didn't have the ability to provide that to help them lower the cost of care. That's something I expect Parkridge will be able to do."
Hospitals are now expected to meet higher quality benchmarks while hospital reimbursements are being slashed. The pinch especially puts rural hospitals at risk.
Grandview has dealt with increasingly severe reimbursement cuts during the past 18 months and the period following federal sequestration, said Medley.
"Rural hospitals are going to have to reinvent how they provide care. Any free-standing, particularly small hospitals are needing to identify potential regional partners to help them sustain services."
In some cases, survival will mean changing services, and in other cases it will mean the creation of larger hospital networks.
Capella itself has more recently sold off more isolated rural hospitals over the past two years, and has redoubled its efforts in regions where its hospitals are in closer proximity, like in the upper Cumberland region.
For Parkridge, the shifting scene is an opportunity to expand the hospital's local reach and consolidate services, said Jarrett Millsaps Jr., CEO for Parkridge East Hospital in Chattanooga.
"The changing landscape is forcing health systems to regionalize their presence. Not every health system is fortunate enough to be in a position to think about that, but we are," said Millsaps, who said Parkridge has shown a "very consistent upward trend" in the past eight years.
Millsaps said Parkridge has maintained relationships with Grandview even after Capella purchased the facility. Parkridge physicians already practice there, and Grandview patients are often referred to Parkridge services.
"Really we are adding some formality to a relationship that has existed for quite some time," he said. "This makes a lot of sense when you look at our footprint and see where we're already pulling patients from."
There will be few visible changes to the hospital's day-to-day operations, Millsaps said. Most of the hospital's 250 employees will be retained, and the physicians will remain the same. Service lines will not be added or taken away.
Grandview spokesman Jamie Lawson said hospital staff will "certainly miss working with our longtime friends and colleagues at Capella," but are "excited about this transition" to Parkridge.
"There are only winners in this transition as our physicians and staff continue to focus on our patients who, as we all know, are our own families and friends," Lawson said.
In the transaction, Parkridge will also acquire the Mountainview Treatment Center, a 20-bed psychiatric in-patient hospital in Jasper, Tenn.
"When you think about trying to get ahead of the change curve in health care, the only way that you can do that is to be proactive and take advantage of opportunities when they come up," said Millsaps.
"This is certainly one of those opportunities."
Contact staff writer Kate Harrison at firstname.lastname@example.org or 423-757-6673.
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