A veteran Texas health care executive is turning around an eastern N.C. hospital
In two short years, the tiny hospital serving Washington County, about two hours east of Raleigh, has gone from the brink of closure to expansion mode.
Things looked bleak for 25-bed Washington Regional Medical Center in 2019, when its out-of-state owner, HMC/CAH Consolidated, filed for bankruptcy. Inpatient services were shut down, and 12,000 county residents had to make lengthy drives for health care.
The situation appears to mirror the case five years earlier in Belhaven, a Beaufort County town 30 miles south. Vidant Health closed its Pungo Hospital there in 2014, replacing it with an urgent care and multispecialty clinic. The old hospital was demolished.
Washington Regional in Plymouth, however, had an unexpected savior. Plano, Texas-based Affinity Health Partners bought the hospital in early 2020 through the bankruptcy proceedings and has the facility up and running. CEO and founder Frank Avignone declined to discuss financial details.
While many rural hospitals across the state have been absorbed into larger regional systems, Washington Regional is Affinity’s only hospital holding. It previously managed facilities owned by other entities, but Avignone was convinced his company could work most effectively at the hospital as an owner.
“We found out very quickly that management of a facility — when you’re answering to a board that may not be as well experienced in health care — is not a winning combination,” says Avignone, who grew up in South Carolina and has been an industry consultant for more than 30 years.
When Avignone’s team arrived in Plymouth, they found a leaky roof, a broken CT scanner, messy patient rooms and a crumbling parking lot. Affinity has spent about $4 million on upgrades, including an overhaul of the radiology department and HVAC systems. The company added women’s health services and is restoring some pediatrics and cardiology care.
Washington Regional now has about 1,500 patient visits a month between the hospital and the primary-care facility next door, including 500 visits a month in the emergency room. The staff has expanded from 30 full-time employees when Affinity took over to more than 160 after reducing temporary contract staffers.
Avignone eventually hopes to build a hospital next door and use the existing facility as a behavioral health facility. “It’s so hard to find a bed for a young child that has had mental issues or an older individual who may have dementia,” he says. “We have to hold patients in our ER all the time.”
Over the past decade, Washington County lost about 17% of its population, or 2,200 people, one of the state’s largest declines. But Avignone says the hospital can thrive financially with good management. “The hospital is doing quite well. It’s not out of the woods completely, but they never really are until such time that they can absolutely support themselves without a whole lot of guidance and management oversight.”
Washington County Manager Curtis Potter says community feedback about Affinity is overwhelmingly positive. Residents are talking about the changes, and patients are quick to tell their friends and family. “The smaller the place is, the more reputation and word of mouth travels,” he says.
While he’d like to see more communication between county leaders and hospital officials, Potter notes a closure would have been devastating. The enterprise is a major county employer, and it’s difficult to attract new business if a community lacks health care resources.
Avignone says the “secret sauce” is strict adherence to federal health care policies. “We follow the rules from A to Z,” he says. Showing personal interest also matters. “I get in scrubs. I will run the floors. People see me in that community caring for that hospital. And since we own the facility, we have a vested interest in making sure that the facility not only survives but thrives.”
The hospital gets a boost from Outer Banks beach traffic passing through Plymouth, some drawn by its billboard. As many as a third of emergency-room patients during the summer months are tourists experiencing “anything from a bad sunburn all the way through a cardiac event,” Avignone says.
Half of U.S. rural hospitals are losing money, says Mark Holmes, director of the N.C. Rural Health Research and Policy Analysis Center at UNC Chapel Hill. “You really need to know what you’re doing and have experience.”
Federal assistance for hospitals during the COVID-19 pandemic has been a lifeline for many. Prior to March 2020, Holmes says, the country was on track to see the highest number of rural hospital closures ever. That didn’t happen because of the pandemic-related funding.
“Many people, including me, are terrified about what’s going to happen as the support starts turning off,” Holmes says. “What happens over the next six to 12 months will be really interesting.”
The increasing popularity of telehealth also means some rural residents may prefer a video appointment with a doctor in a larger city rather than a visit to a local doctor. “Telehealth could be worse for rural providers, but it may be much better for rural patients,” Holmes says.
To help Affinity succeed, Washington Regional has converted into a nonprofit entity. Avignone plans to do the same with other acquisitions. The move makes the hospitals eligible for a variety of grants and, he says, sends a message. “I think that shows a lot of trust — that we’re going to be advocating for them as community members as well as patients.” ■
