Sale of Chestatee Regional Hospital could have enormous economic impact on Lumpkin County

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Dr. David Miller

DAHLONEGA, Ga. — The economic impact the sale of Chestatee Regional Hospital to Northeast Georgia Health Systems (NGHS) could have on this rural mountain community cannot be overestimated.

“The opportunity it creates for economic development, I believe, is huge,” said Dr. David Miller, a member of the NGHS Advisory Board, professor of healthcare management in the MBA program at Brenau University and a Lumpkin County Commissioner.

“Healthcare jobs are some of the highest-paying jobs around and it’s not just the physicians and nursing jobs. It’s lab and pharmacy techs, IT services, maintenance crews and management positions,” Miller added.

The need for ancillary services a facility of this type creates, likewise, is enormous. As Miller said Wednesday, “You need to feed the employees. They need housing. They need recreation. They need tires for their cars. The list goes on and on and on.”

However, like the highway that runs between NGHS and Chestatee, which is a very curvy one, so is the road between an old hospital and a new one.

A CBS News report last week that Durall Capital Holdings and Chestatee Regional have used questionable billing practices caught everyone by surprise. Durall Chief Executive Officer Aaron Durall purchased Chestatee for $15 million in 2016. The CBS report alleges the hospital has billed insurers for testing services that were never performed at Chestatee.

Insurers pay much higher rates for testing services performed at small rural hospitals to help keep them financially functional. However, insurers claim the tests were performed at Durall’s Florida lab. As a result, more than a dozen subsidiaries of insurer Anthem have filed a lawsuit against the hospital and its owner.

Durall has denied the allegation and said that every service billed was done at Chestatee.

NGHS spokesman Sean Couch told Georgia Health News the health system was not aware of the allegations until last week. “As part of the agreement, the owner is required to close the facility,’’ Couch said. That way, it is expected that any current liabilities would not go to the acquirer.

NGHS has 90 days to conduct a due diligence study. During that time, a decision will be made about when Chestatee will close.

In 2015, NGHS purchased 57 acres at the end of state Route 400 near its intersection with state Route 60 and announced its intention to build a hospital there.

“They have to make a decision about whether to build or not by the end of the year,” Miller said. “They don’t want the Certificate of Need to go back to the state and that’s what will happen if they don’t declare by then.”

In addition to the enormous impact the sale could have on the Lumpkin County economy, educational opportunities are unlimited.

“It dovetails nicely with what Lumpkin County High School is doing through its CTAE pathways, business education, the various health care professions and sports medicine studies they have,” Miller said. “They also have a big audio-visual production track which could fit in nicely with some of the things the hospital is doing. It’s a great opportunity for internships for our high school students.”

Meanwhile, the University of North Georgia (UNG) has reached an agreement with NGHS to purchase Chestatee in order to expand its campus. State lawmakers have set aside funding in the 2019 budget for the Board of Regents to buy Chestatee. That deal must be approved by the Georgia Board of Regents

While UNG would not occupy the facility for the next couple of years, it could eventually house nursing, physical therapy and counseling education programs in addition to two existing outreach clinics from the counseling and physical therapy departments.

Miller said he was not surprised that NGHS agreed to purchase Chestatee: “They have been interested in Lumpkin County for a couple of years. But it’s always a surprise when something this complex actually comes to be. Remember, we not only have Northeast Georgia, we have Chestatee Regional involved. We have the University of North Georgia. We have the city, the county. There were a lot of balls in the air for a long time. We had Sen. (Steve) Gooch, Rep. (Kevin) Tanner and the Board of Regents. So it is a pleasant surprise. For all these things to come together. It took a lot of hard work from a lot of people for a very long time.”

 

 

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