Yr in Review: Ty Cobb Healthcare Fails to Make Hospital Bond Payment

By the end of the 2014, Franklin County had been dealt another major financial blow when Ty Cobb Regional Medical Center CEO Greg Hearn announced in November the hospital could not make its $311-thousand dollar bond payment that was due December 1.
Just two years after its grand opening, the hospital found itself in a financial crisis so severe, it faced closing its doors.

In a joint press release issued in November, officials with Ty Cobb Healthcare, Franklin County, and the Franklin County Industrial Building Authority said they were working together to stabilize the hospital’s financial condition and ensure its future.

“It’s part of an overall strategic process that we’ve undertaken that actually includes restructuring the debt,” Hearn said. “It actually will put the hospital on a more stable financial basis. The debt restructuring is one part of the plan and then a strategic partnership with a larger hospital. That’s also underway although nothing is yet final. So that’s all part of a plan to ensure the hospital’s long-term success.”

Hearn said in 2013, the hospital lost some $15-million dollars in bad debt and indigent patient care.

And earlier in 2014, Ty Cobb Healthcare sold off all three of its nursing home facilities in Royston, Hartwell and Comer in an effort to keep the books balanced and save money, but the Hospital still found itself in the red and unable to meet its bond debt repayment.

The County faced losing its sterling credit rating if the bond was not paid and former County Manager John Phillips admitted in November that the county wasn’t sure where the money would come from to pay the bond.

“That’s correct, that money is not in the budget for Franklin County,” Phillips said. “We are actually in talks with the Industrial Building Authority. We think they are going to partner with us, in all likelihood in the form of a loan to make this December 1 payment. Now, Franklin County may actually end up reimbursing the IBA later for those funds. But due to the fact that the funds are not in our budget, we’re working with the IBA to come up with a plan as to exactly how those funds will be obtained.”

But the IBA did not step forward to help as hoped and the County ultimately agreed to take the bond payment out of its reserve fund.
Meantime, the hospital authority board continues to search for a larger hospital to either partner with Ty Cobb Healthcare or purchase the facility outright.

The next $311-thousand dollar bond payment is due on June 1st.