This Election, Circleville Voters Could Determine Fate Of City's Only Hospital

Nov 6, 2017

Circleville relies on Berger Health System. For residents of this Pickaway County city, Berger Hospital is the only one within about 20 miles. And like many rural hospitals, it’s on the brink of closure—that is, unless locals vote to save it.

Though Tuesday's election won't determine many races of national significance, it may have a huge impact on this city of 13,000. Currently owned by the county and the city of Circleville, the hospital says it's struggling to survive. If something doesn’t change, it may have to cut services and could eventually close.

It's now up to voters to determine if Berger Hospital can change its ownership model. 

"I do look at the foundation that suspends Berger Health System, and we begin to see cracks in that foundation," says Hospital CEO Tim Colburn. "What we’re worried about is one of those cracks leads to a large fissure."

Colburn says profits were just over $1 million last year. Colburn says that moving to a 501c3 non-profit status and creating deeper ties with Ohio Health, the Columbus-based health care system, would attract better medical talent and ensure the future of hundreds of existing hospital jobs.

A $1 million profit might not sound bad, but the margins are razor thin—just about 2 percent.

"A sustainable healthcare organization should make about 4 percent," Colburn said.

The measure to switch to non-profit status is endorsed by the Pickaway County commissioners, city of Circleville government, and the hospital itself. Meanwhile, there's no formal opposition. 

"In the ordinance passed by City Council, it states that if any change in ownership of the hospital, it needs to go in front of the voters of the city of Circleville," says Mayor Dan McIlroy, who is on the Hospital board of governors.

No such law exists countywide, so only Circleville voters need to sign off. 

"Our hospital is the number one employer in the city of Circleville," McIlroy said. "It is very, very important for us to keep that hospital here."

Berger Health System is the only hospital serving the city of Circleville's 13,000 residents.
Credit Berger Health System / Facebook

More than half of the 600 people on staff live here in Circleville, and Colburn says it drives more than $40 million of economic impact to the community. 

Downtown boutique owner Tony Jankiewicz supports the measure with a “Vote yes for Berger!” sign in his storefront window.

"Sometimes it’s time to move on and do other things," Jankiewicz says. "What was working in the past is not working in the future. So we’re at a big disadvantage, Berger is, as far as competing in the health care world the way it is right now."

Mary Gallagher, executive vice president of the Ohio Hospital Association, says Berger shifting to 501c3 status would fit into a recent trend. Gallagher says the association represents 220 hospitals and 13 health systems in Ohio, among which are 166 nonprofit hospitals and 24 publicly-owned hospitals.

Berger Health, meanwhile, is the only hospital owned by a city and county.

"That’s a trend we have definitely seen in Ohio over the last 10 or 15 years," Gallagher says. "We’ve had several small, government-owned hospitals convert to private nonprofit charitable organizations."

This change is especially important for smaller rural hospitals. By going private and joining up with a healthcare giant like Ohio Health, they can tap into a pool of specialists and technology that would otherwise be out of reach.

"A private, nonprofit hospital will have better access to capital, to be able to borrow money to do basic improvements," Gallagher says. "To improve their physical facilities, typically smaller hospitals are older buildings and they have a lot of capital needs to keep their facilities up to date."

There’s still a chance the measure fails at the polls on Tuesday. Colburn says that could mean trouble for local health care.

"You discontinue services locally, there’s less employment, there’s more people driving outside Pickaway County for health care, and it becomes a vicious cycle that more and more services are done someplace else," Colburn says.

Colburn says the city's top priority is to keep the hospital local. Circleville voters will have to decide if they agree.