Three experts discuss trends reshaping Alabama’s health care landscape and describe their impact on our region—and you. Responses have been edited for clarity and length.
The Rise of Hospital Consolidation
Steven Howard
Director of UAB’s Master of Science in Health Administration (MSHA) executive program.
Key info: UAB’s MSHA is ranked number one by U.S. News & World Report, and alumni lead hospitals and health systems around the country. Howard’s courses cover strategic planning and management, marketing, and more.
Why do hospitals join forces?
Howard: Consolidation ebbs and flows with changes in the economy or health policy, and it happens across the country. It runs the gamut from hospitals purchasing other facilities [including UAB’s purchase of Ascension St. Vincent’s] to partial ownerships [such as Orlando Health’s acquisition of Tenet Healthcare’s majority stake in Brookwood Baptist Health hospitals] or managed services agreements where a bigger hospital does everything except own the real estate. Or they might have an affiliation agreement, as UAB has done with several hospitals statewide.
Why? If you’re a big health center with a transplant center or level one trauma center, for example, you need volume to maintain specialized facilities and staff. So you need contact with thousands of patients to bring in complex cases. It’s useful to have smaller, local hospitals funneling high-acuity cases to the hub while they handle lower-acuity cases.
Sometimes consolidation is about capitalizing on opportunities. Across the country, Ascension and Tenet are the two biggest sellers, and everybody adjacent to those hospitals wants to pick them up to dominate their market. Orlando Health has grown aggressively by looking for opportunities in their footprint. In Birmingham they saw a market with plenty of room to go toe to toe with UAB.
How does consolidation impact care?
Howard: I am optimistic that the quality of care in Birmingham will increase because UAB and Orlando Health both have well-established quality improvement programs.
In small communities, some systems scale down the scope of their local hospitals to just primary care, general surgery, or an emergency department. But those hospitals get resources from being part of a bigger system, including getting specialists when they need them, adding telehealth capabilities, etc. And they can triage a patient to the big hospital quickly.
The shortage of health care workers may become more manageable. Systems with more employees and facilities may be able to move people around as demand for care fluctuates, for example.
Access can be hard for patients if the new systems don’t take their insurance. Nationwide, a lot of hospitals are ending relationships with some insurers because of rising denials for claims. Some insurers also are exiting markets where they aren’t making enough money.
Will the cost of care increase?
Howard: When consolidation goes in the direction of being monopolistic, then prices go up. The Department of Justice watches these mergers, and they reject some. We should have robust competition between the two massive players now in the Birmingham market.
What is the sign of a successful hospital combination?
Howard: Melding the cultures of different hospitals is the biggest wild card, and getting it right is essential. It’s more complicated than in other industries because health care has more management by consensus and more constituencies to consider. If leadership is proactive in making people feel welcome, valued, and equal, then the marriage can be harmonious. They need to make them feel like one family.
Hospital Closures in Rural Counties
William Curry
UAB professor of medicine (emeritus) and former UAB associate dean for primary care and rural medicine. Former president of the Medical Association of the State of Alabama. He began his career as a rural Alabama physician.
Key info: Alabama has 51 rural hospitals providing care to 44 percent of its population, according to the Alabama Hospital Association (AHA). In 2023 the AHA reported that half of Alabama’s hospitals are in the red financially, with 15 in danger of closing.
Why are rural hospitals closing?
Curry: Lots of hospitals were built after the 1946 Hill-Burton Act provided federal money for construction. Inpatient care based on the number of licensed beds held everything together financially. But over the last 50 years, we haven’t required as many beds because we have better technology, medicines, and procedures. Now somebody needs to be really sick to be an inpatient, and the business model doesn’t work as well. There’s decreased volume, but with sicker patients and higher costs.
In the 1980s and 1990s, we moved to a prospective payment system providing so much per day for a given diagnosis, and hospitals needed higher volume to make it work. Then we added value-based care with incentives and penalties based on how well, or how badly, things go. If somebody develops hospital-acquired pneumonia, for instance, you get penalized. Those changes worked against rural hospitals.
Rural economic changes are another factor. Less farming and light manufacturing mean less local employment and less of a tax base. A lot of young people are leaving. And while chronic illnesses such as heart disease or COPD have increased everywhere, rates are higher in rural communities. So you’ve got an older, sicker, high-risk population that needs care.
Many medical professionals also are drawn toward careers in specialty care and toward positions in urban and suburban settings. These bring more money and prestige and are less demanding.
How do closures affect rural residents—and people in cities like Birmingham?
Curry: It’s really the loss of a health system, not just a hospital. You lose the emergency room, after-hours coverage, diagnostic facilities, physical therapy, dietary care—things doctors’ offices in small towns typically don’t have. You begin to lose physicians and have more difficulty recruiting new young doctors.
For trauma cases, it may be 40 miles to the nearest emergency room. The vast majority of Alabama counties now have no maternity care. Even Shelby County has become an obstetric desert with Shelby Baptist closing its obstetric service. In some rural areas, a pregnant woman in labor may need to travel two counties away to deliver the baby.
What else happens? Typically a rural hospital is second only to the public school system for payroll. So a county can lose jobs and millions of dollars in economic impact. When more people are unemployed, some require public support, which impacts everyone in Alabama.
For Birmingham, there’s a bigger demand for our hospital beds from rural patients and for transportation to get them here. It also means that when you drive to the beach or a football game, you may travel through a county with no hospital, no emergency room, and marginal staffing of its ambulance service. So drive carefully. You don’t want a big wreck there.
How are communities trying to rescue hospitals?
Curry: Some hospitals have affiliated with other health systems, which has been a mixed experience. UAB, for example, provides management and financial expertise to a network of small, rural hospitals, which provides stability and helps them shed some overhead costs. The Tuscaloosa campus of the UAB Heersink School of Medicine was instrumental in restarting the obstetric program at the Demopolis hospital by putting a faculty member there.
Pipeline programs at the UAB medical school campuses have been successful in matching rural students to rural practice, with statewide help from Alabama Area Health Education Centers. The challenges are great, but there are young physicians, nurse practitioners, and physician assistants who want the satisfaction of rural practice. We need to support them as much as we can.
Are there ways to fix the underlying problems?
Curry: The single best solution would be a stable, booming economy, but that probably won’t be universal. Expanding Medicaid is a consideration. We also need different care models.
Because rural areas have a Medicare- and Medicaid-heavy population, there are federal programs supporting different categories of freestanding emergency rooms or small hospitals with a limited number of beds for patient observation. They provide the after-hours care of the emergency room and diagnostic facilities that counties need. But the way the regulations are written, not every place qualifies for those. The regulations need to be rethought so that every rural community can get essential access for emergency services and acute care.
A successful program in Mississippi uses physician assistants and nurse practitioners as rural emergency room providers with telemedicine backup from the university hospital in Jackson. They are trained at the university hospital and placed at essential-access hospitals around the state. That’s something our Alabama hospital association and legislators could do. It doesn’t help closed hospitals, but it would help existing ones by providing workforce and reducing costs.
The Care Gap in Low-Income Communities
Robert Record (LB ’13)
Christ Health Center CEO. Family medicine physician.
Key info: Record cofounded Christ Health Center in 2005. Today it is a federally qualified health center (FQHC)—a nonprofit provider of care for medically underserved communities that receives some government support. Its locations in Woodlawn and Chalkville offer adult, pediatric, ob/gyn, dental, mental health, spiritual, and pharmacy services. A Roebuck pediatric clinic is under construction.
What drives inequalities in health care access?
Record: America’s health care system is designed for a clientele of middle income and higher. As a result, we disproportionately allocate physicians and medical facilities to those communities. Financially, the investment to start a clinic in communities of need doesn’t make sense. When health care became big business and added layers of rules, it became so complex and expensive that you can hardly have small shops anymore.
People of middle income and higher also prioritize efficiency. The fee-for-service care of the health care financing system is designed around how many patients a doctor can process. In communities of need and trauma, patient care just takes longer.
For us this is spiritual work. We will spend more money and time to care for patients who pay less. And the difficulty of providing that care is high.
The health care system does a lot of things to communities of need and not with or among them. They do focus groups, for instance, but people in survival mode know to tell them exactly what they want to hear. The way to begin experiencing a community’s need—and to develop solutions with the community—is to walk with that community long enough to build trust. Along that journey, we find misalignment in values with the people the health care system is intended to serve. For example, things like disease prevention make sense to middle-income families, but for families living at a survival level of income who worry if they will eat today, we might as well be speaking a foreign language. For these neighbors, finding enough calories so they aren’t hungry is understandably more important than whether the food is ultraprocessed. The trust gap is a barrier of care in Alabama and across the nation.
What are some solutions?
Record: An important solution is to inspire young physicians by letting them see and feel health care among the underserved. Almost every one of them, once they are touched by it, can’t shake the feeling they were wired for it. Christ Health Center has about 200 different learners a year in a family medicine residency program and student rotations. We have had remarkable success with these clinicians wanting to practice in neighborhoods of need. These young leaders recognize that even if they have less income and more frustrations, they’ll have a better life. They find internal satisfaction because they’re living in harmony with eternal values.
Would expanding Medicaid help?
Record: Alabama should have expanded Medicaid. But when we do—I think it’s when, not if—we still have a broken system. With the Medicare wage index, a doctor in Alabama receives significantly less money from the federal government than a doctor in another state doing the same procedure at a similar hospital with the same level of care. That’s because the government has said Alabama is a poor state, and it’s cheaper to live here, so we can be paid less. And it becomes an inertial cycle that also spurs our commercial payers and perpetually keeps us at the bottom. The “keep the poor poor” doctrine is as unjust as it is easy to perpetuate.
Are we making progress in providing care to underserved communities?
Record: In 2005 we jumped in where we felt a need. Now look at what we are doing in eastern Birmingham and what Cahaba Medical Care and Capstone Health [both FQHCs] are doing in western Birmingham, north of the city, in the Jasper area and Carbon Hill, and in the Black Belt. We are seeing an awakening. Providers are saying they won’t cede their lives to a broken system and will provide care anyway. Among Cahaba, Capstone, and Christ Health, we saw more than 60,000 unique individuals in 2024, which is extraordinary. It makes me hopeful and optimistic. And our impact will be exceeded by the generation of physician leaders we’ve trained.