A city that has had its share of economic body blows took another one Wednesday with the news that Good Samaritan Hospital will close its doors by the end of the year and move 1,600 jobs out of the northwest Dayton neighborhood where it has served as an anchor for nearly a century.
The shocking news, announced Wednesday morning by Dayton-based Premier Health — Good Samaritan’s parent network — caught employees and city officials off-guard as few outside of Premier’s office suites apparently saw it coming.
“Not only was Good Sam an economic anchor to northwest Dayton, but they also were a neighborhood stabilizer,” said Dayton City Manager Shelley Dickstein. “We are gravely concerned about an exit of that anchoring presence.”
Premier said its goal is to offer all employees other positions in the company. But that isn’t much solace for the neighborhood around the massive complex, which was first constructed in 1928 and added onto many times since.
The satellite locations – Good Samaritan North in Englewood and Good Samaritan Health Center Huber Heights – will stay open. The hospital’s federally qualified health center that is on site will also remain open, which officials said is a busy ambulatory center with primary care and as well as some specialists.
Premier CEO Mary Boosalis said the emotional decision to close the hospital wasn’t an easy choice.
“On a personal note, I can tell you that this is the most difficult but necessary decision that most of us ever have to make,” she said, adding: “The consequences of inaction are far too great because we know the status quo is unsustainable in this environment.”
Premier officials said the aging Good Sam campus is expensive to keep up and duplicates many services five miles from Miami Valley Hospital, another Premier-affiliate. The population in the surrounding neighborhoods are declining and the hospital is operating at half capacity, with Premier already shifting beds to other hospitals in the system.
Premier — the region’s largest private employer — operates three other hospitals and a large physician network goal.
But like other hospital networks across the country, Premier has been betting that their future isn’t more hospitals; it’s outpatient facilities and smaller health care centers.
The typical hospital stay has been getting shorter and the number of people needing to be hospitalized is down. Premier’s hospitals in Dayton are at about 50 percent capacity.
Declining reimbursements and a tumultuous health care climate in Washington, D.C. also have hospital systems like Premier feeling squeezed.
“Dayton, Ohio, is essentially a microcosm of the pressures you see in our industry nationally,” Boosalis said.
The 2222 Philadelphia Drive hospital campus is aging and Boosalis said it would cost more than $90 million or more to keep the facility up to code over the next decade.
Premier will also save about $7 million to $8 million annually in operating costs by shifting services to other hospitals.
Boosalis said by closing the hospital now instead of later “we’re doing this now from a position of strength so we can be around for another 125 years.
“I think the worst thing our board and myself could do would be not to pay attention to the factors in this industry and ignore the facts and then be in a crisis mode.”
The goal is to move major services to Miami Valley Hospital and avoid duplication of services.
The board of trustees has approved a “significant” donation to the site for redevelopment so the goal is to make it shovel ready with the exception of the remaining buildings and work with the community on the future of the location.
All the buildings will be razed with the exception of the federally qualified health center and the parking garage.
Premier plans to have meetings with community leaders, focus groups and surveys as part of its outreach activities while it makes a plan for the future of the Good Samaritan site. City Wide Development and Planning NEXT, a design firm based in Columbus, are working with Premier on the site plan.
“The input of the community is not only wanted, It’s absolutely critical as we work together to transform Good Samaritan Hospital as we go forward,” Boosalis said.
Bryan Bucklew, president and CEO of the Greater Dayton Area Hospital Association, said there’s been huge changes in the health care delivery trends and health care policy that have shaped how hospitals make infrastructure decisions.
The average length of a hospital stay was 11 days in 1975, a little over 6 days in 2008, and then by 2015 was down to an average of 3 days.
“So in just six or seven years, you’ve decreased your length of stays by almost 49 percent,” he said.
On top of that, about 79 percent of patients in the Dayton area pay with Medicaid and Medicare, so dramatic policy changes and uncertain future of health care of those government insurance programs all shake up local hospitals.
Bucklew said said it’s important that the local hospital networks are all non-profits and locally headquartered, with trustees who live in the communities affected by their decisions. He said Premier is still being mission-minded when weighing decisions like closing Good Sam and if the hospital networks were instead for-profit, the community would feel the negative affects during tough financial times.
“If these organizations were run like for-profit entities, there would be whole service lines that would go away. No one would get into mental or behavioral health. No one would get into detox centers,” he said.
Scott McGohan, CEO of McGohan Brabender, the largest local employee benefits firm, said the employers he works with want to lower the cost of health care and part of making health care more affordable is making tough decisions like closing Good Sam.
“As we pepper these institutions to lower health care costs … it’s hard to condemn them for making these decisions,” said McGohan.