Pioneer Community Hospital, a 25-bed facility in Patrick County, closed in 2017. Freshman Del. Wren Williams is hoping newly passed legislation will help the rural hospital reopen its doors. (Courtesy of Addison Merryman)
At first, Wren Williams just wanted to study if reopening the hospital was feasible.
Over the last five years, the freshman delegate from Patrick County had watched his community struggle to revive Pioneer Community Hospital, a 25-bed facility that closed suddenly in 2017 amid bankruptcy proceedings for its Mississippi-based parent company.
The news was so unexpected that medical workers had to start diverting patients from the local emergency room in Stuart. Residents later learned that a deal to sell the site had fallen through at the last minute, saddling much of the community with a 30-mile drive to the next closest hospitals in Martinsville and Mount Airy, North Carolina.
Efforts to reopen Pioneer stalled over the next few years. Williams said the bankruptcy case left a massive lien on the property that didn’t expire until 2021 — a major deterrent for other investors. There were early efforts to extend the hospital’s licensing, but by 2019, local officials told the Associated Press that revitalizing the site was financially unworkable.
“So, the property has just been sitting there, closed, since that day in 2017,” Williams said. At the start of his first term this year, he filed HB 1305, which initially directed the Virginia Department of Health to examine the possibility of reopening Pioneer on the original site or two other locations in Stuart. Williams wasn’t ready to give up, but said he wasn’t sure the building — vacant for the last five years — could even function as a hospital anymore.
But as the session moved forward, the bill started gaining traction. Through conversations with the Virginia Hospital and Healthcare Association and other health systems in Virginia, Williams said he learned the original location was still viable. Once that became the focus, the effort switched to making the site more attractive to investors.
VDH stepped in to help redraft the bill, crafting legislation that restored the site’s certificate of public need, a type of state licensing typically required for almost every new medical facility. Navigating Virginia’s COPN process can take thousands of dollars and multiple years to complete, but Williams’ bill — which passed the General Assembly unanimously — will allow new buyers to bypass the process as long as the hospital reopens with the same equipment and number of beds it had before. “It was the right size and it’s been the right size since it was built,” Williams said. “That was what we needed, and we didn’t want to ask for anything more.”
Since the bill passed, there’s been a flurry of new activity surrounding the hospital, including — at last — a purchase. Virginia Community Capital, an economic development nonprofit, confirmed it sold the building last week to a Chicago-based holding company legally registered in Virginia Beach.
A spokesperson for the company confirmed it was purchased by Foresight Health Investment Group, a “health care organization” with plans to convert the site to a medical facility. But the company wouldn’t confirm details of the proposal, saying in a statement that “plans and timelines will be announced at a later date.”
While the future of the site is still unclear, experts say it’s rare for a rural hospital to reopen. Pioneer is one of two facilities in Virginia to close over the last decade, and nationwide, a total of 138 rural hospitals have closed since 2010, according to data from the Sheps Center at the University of North Carolina. Facilities have been strained by an overall population decline in rural areas coupled with a growth in outpatient services. Rural hospitals also frequently serve a higher proportion of patients on Medicaid or with no insurance at all, leading to tighter operating margins and higher rates of bad debt.
Julian Walker, vice president of communications for the Virginia Hospital and Healthcare Association, said roughly a third of the state’s rural hospitals had negative operating margins in 2020, a higher share than the fifth of all hospitals across Virginia. Pioneer also struggled financially when it was still in business, state records show.
From 2014 to 2015 — the latest available data from Virginia Health Information, a state-run nonprofit that compiles health care data — the facility spent more than $1 million more on expenses than it brought in through patient revenue and other operating income and recorded more than $8.7 million in long-term debt. “It definitely was not turning a profit,” said Deborah Waite, VHI’s chief operating officer.
Finding a sustainable business model is just one of the challenges. Beth O’Connor, executive director of the Virginia Rural Health Association, said reopening a hospital is a lengthy process requiring both state and federal recertification, which can take multiple site visits and often renovations to bring the building up to code. Pioneer’s assets were sold as part of its bankruptcy proceedings, which means new investors would also need to purchase new equipment and furnishings, according to Erik Bodin, director of the COPN division at the Virginia Department of Health.
Williams’ legislation, which effectively bypasses some of Virginia’s biggest regulatory hurdles, would help speed up the process. “Mostly it reduces the time required for someone to move in there, and obviously time is money,” Bodin said.
But reopening the hospital would also mean recruiting new staff, sometimes a challenge in rural counties. Dr. Richard Cole, the founder of Patrick County Family Practice, said he’s struggled to find someone to replace the office’s only other physician, who’s set to retire at the end of the month.
“It’s been very difficult — doctors are in very short supply,” he said. “And I’d say the new, young family practitioners coming out of training tend to land in big hospital systems.” Without a new replacement, Cole would be left as the community’s only doctor. His office is currently the only family medicine practice in Patrick County, which spans a 483-square mile stretch along Virginia’s southern border.
‘I’ve told my wife, if anything happens to me, put me in the truck and drive me to the ER’
It’s a real-world example of how rural hospital closures can hit communities where health care options are already scarce. Cole said Pioneer was also the sole provider of specialty care including cardiology and podiatry. When the hospital closed, it left patients without a place to go for many essential health services.
“You used to be able to get mammograms here locally,” he said. “And I’d say a lot of women are not getting their mammograms now because the nearest clinic is 30 miles away.” Then there are more obvious repercussions, including the loss of a local emergency department, which has put a real strain on the county’s first responders.
Williams said one of the biggest impacts has been a loss of participation in volunteer rescue squads. Manufacturing is Patrick County’s largest industry, and with a hospital in town, it used to be easy for workers to step off the line for a 25- or 30-minute ambulance ride. Now those calls can mean a three-hour round trip, according to Chelsea Spangler, who volunteers as an emergency medical technician for Jeb Stuart Rescue Squad.
“It’s not the same where you can ask your boss, ‘Hey, do you mind if I run that call, I’ll be right back,” she said. Neighboring Henry County has two helicopter services, but Williams said they’re not always available or able to fly when weather is bad. That leaves volunteer squads handling the majority of the county’s calls, which can bring wait times for ambulances up to half an hour.
Spangler said it’s led to delays in care and even to tragedy. A recent patient called 911 for chest pain but died before an ambulance could reach him.
“It’s sad, but I’ve told my wife, if anything happens to me, put me in the truck and drive me to the ER,” Williams said. “Our EMS can’t get here fast enough because they’re always running other calls or they’re out of the county with other patients.”
Local leaders have spent years advocating for a new hospital in the face of those community pressures. But there’s been hesitation to bring in private investors given Pioneer’s rocky history. In 2018, the chairman of Patrick County’s Board of Supervisors said the county should purchase the building and lease it to a third-party hospital operator so that officials could replace the tenant if the venture failed. But the initiative never took off, largely because the county couldn’t afford the $5.5 million asking price for the site (Virginia Community Capital wouldn’t disclose the final sale price).
Two years later, a local advisory council dismissed the idea of reopening the hospital, citing the prospective cost of renovating or replacing the aging building, according to reporting by Cardinal News. Some community members are still skeptical that a traditional hospital model would work for Patrick County.
Cole said it might be possible if the facility could regain its status as a critical access hospital, a federal designation that includes higher Medicare reimbursement rates. In 2021, Congress also introduced a new rural emergency hospital model that boosts payments even more for facilities that meet certain criteria. Even then, he said it could be an uphill battle.
“We have an elderly population and a very high percentage of our residents on Medicaid and Medicare,” Cole said. “And when that’s the bulk of people using your hospital, it’s hard to find any place where you can make a profit.”
Still, there’s already a precedent for success in Virginia. Medicaid expansion has been a crucial protection against closures by connecting more than half a million Virginians with health insurance, reducing uncompensated care for hospitals across the state. Only two rural facilities in Virginia have closed in the past decade, including Pioneer — a sharp contrast to non-expansion states like Texas and Tennessee where more than a dozen have shut down.
The other, in Lee County, successfully reopened in 2021, an accomplishment O’Connor described as almost unheard of. The hospital was saved in large part through community organizing, including the formation of a local hospital authority that purchased the building two years after it closed.
But another large health system also played a crucial role. In 2019, the authority sold the site to Ballad, which holds a monopoly on hospital services across Southwest Virginia and much of Northeast Tennessee. It was a success story for Lee County, but it’s still not clear if other rural communities can follow the same model without buy-in from a much larger provider.
“Certainly, the people in town liked having that hospital there — hospitals are good for the community, they’re good for industry, they’re good for job creation,” Bodin said. “But I think one of the big determining factors for Lee County was the creation and the presence of Ballad Health.”
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