A mayor fights to save a small-town hospital: ‘It’s life or death’

Mayor Adam O’Neal wants his hospital back.

He was born in Pungo District Hospital in the sleepy town of Belhaven, N.C. Decades later, as mayor of Belhaven, he counted on the hospital to provide not just health care, but scores of jobs. In his rural stretch of coastal North Carolina — beautiful but isolated, with a painfully high poverty rate — he saw Pungo as the “heartbeat” of the community.

That is, until the hospital was shut down on July 1, 2014, less than three years after a much larger health system had purchased it.

Ever since, O’Neal has fought to revive the hospital. His last chance may come Wednesday as Belhaven residents go to court to try to block its demolition. The mayor sees it, quite literally, as a matter of life and death.

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“I keep seeing pain in my community, people calling me crying, and that’s why I’m hollerin’ and fussin’,” O’Neal said.

He knows locals who had heart attacks that caused far more damage than they should have because with Pungo closed, it took more than an hour to get them to the nearest hospital with emergency services.

“There are people with strokes, who could’ve recovered, but can’t now,” O’Neal said. “There are needless deaths.”

Since 2010, at least 75 rural hospitals, including Pungo, have been shuttered in the US. Almost half of those were in the South. These hospitals tend to be as small as the towns they serve — and often are found in areas that many health care providers have ignored.

Even those that remain open are struggling: More than a third of rural hospitals operate at a loss, according to the National Rural Health Association. One in four is at risk of closing in the next decade.

In communities like Belhaven, a majority-black town where nearly 1 in 3 residents lives below the poverty line, a hospital closure leaves locals in dire straits.

Many in the Belhaven area lack insurance — North Carolina did not expand Medicaid under Obamacare — and don’t have transportation to get to the nearest safety-net hospital, located about 25 miles to the west.

Belhaven salon owner Eunice Williams, who lives outside of town — nearly 50 miles east of the nearest open hospital — said many people she knows rely on free rides from their neighbors to get care when they need it. “A lot of people can’t even afford gas to get to Belhaven,” she said.

After shutting the hospital, Vidant Health, one of the largest health care systems in North Carolina, built an around-the-clock urgent care center in town. It opened this past summer, offering primary and preventive care, prenatal and cardiac consultations, and a helipad for emergency transport. Vidant spokesperson Christine Mackey said the company believes the urgent care model “is the right direction for communities like Belhaven.”

O’Neal and his allies say it’s not enough.

In his quest to save Pungo, O’Neal has marched more than 700 miles, trekking to Washington, D.C., on foot multiple times, as well as to the statehouse in Raleigh, usually wearing a “Save Our Hospital” T-shirt. With the help of progressive black activists, including the NAACP, the conservative white mayor has raised hundreds of thousands of dollars in futile attempts to buy back the hospital property.

The diverse coalition was on full display earlier this month as the Rev. Curtis Everette Gatewood, field director of NAACP’s state branch, led a couple dozen protesters in “Save Our Hospital” chants outside the governor’s mansion in Raleigh. O’Neal stood nearby, clad in his hospital T-shirt, lining up speakers for the parade of local TV reporters.

“Whether you’re from Belhaven or New York, whenever a local hospital closes, that is our hospital,” Gatewood told the protesters. “Those are our people dying, because we are part of a larger family of humanity.”

A bankruptcy and a surprise decision

When Pungo District Hospital opened in 1949, it was one of the first in the nation to be designated a Hill-Burton hospital, which meant the federal government offered loans for construction in exchange for a pledge to treat those unable to afford medical care.

The area around Belhaven — a vast stretch of the Inner Banks that spans several counties and is home to soybean farmers and seniors settling into retirement — long relied on Pungo for everything from childbirth to critical care.

But the 49-bed nonprofit hospital struggled financially. It cobbled together a mix of Medicaid and Medicare reimbursements, grant funding, and community contributions, yet still spent a few years in bankruptcy in the early 2000s.

By 2011, the Pungo District Hospital Corporation, which owned and operated the hospital, had sustained enough losses to consider selling. It reached out to Vidant, which today owns eight hospitals and serves over 1.4 million patients, and which specialized in nonprofit hospitals. By summer’s end, a deal was reached.

Vidant started to invest in the Belhaven hospital, including a $2.4 million electronic records system. But in September 2013, Vidant’s board shocked Belhaven residents when it announced the hospital would be closed.

Across its entire network, Vidant rang up a surplus of $109.6 million in the year leading up to the closure — but the nonprofit health system lost $1.1 million on Pungo during that period. David Herman, the company’s then-CEO, cited the state’s failure to expand Medicaid as one reason for the shut down; it meant the hospital would continue to limp along without enough insured patients — or revenue — to repair its aging building.

A ‘crazy mayor raising Cain’

It was around then that O’Neal became, as he now quips, “that crazy mayor raising Cain.”

Now 47, O’Neal is stocky and starting to gray; he sells insurance whenever he isn’t busy being mayor of Belhaven. More often than not, though, he’s performing those mayoral duties, including the fight to save Pungo.

He’s demanded, and received, meetings with top state and federal officials, including North Carolina Governor Pat McCrory and Health and Human Services Secretary Sylvia Mathews Burwell. He secured a federal loan commitment and a certificate of need, a legal document the state requires to operate a hospital.

Along the way, activists like the Rev. William Barber II, the state NAACP president, and Bob Zellner, a prominent civil rights activist, became unlikely allies.

With the NAACP’s help, Belhaven sued Vidant over a breach of contract and unfair trade practices. O’Neal argued that the community board never would have sold if they had known Vidant would shut down the hospital, throwing nearly 100 employees out of work in a county that at the time had a 7.7 percent unemployment rate — well above the national average of 6.2 percent. (A judge later dismissed the lawsuit.)

The mayor and his allies also filed federal civil rights complaints that accused Vidant of discrimination against “very poor minorities.” One complaint prompted the federal Department of Justice to mediate a agreement in April 2014 that kept the hospital open for several more months. Vidant agreed to transfer ownership of Pungo to a community nonprofit called Pantego Creek LLC.

O’Neal still believes Pungo, which brought in $10 million in revenue the year before it shut down, can operate in the black without Medicaid expansion. He cited multiple plans for doing so, including one that would downsize the facility to 10 beds and another that would turn over part of the hospital to serve veterans.

But before the hospital could get back online, the community nonprofit that owns it would have to sell it to a health care operator. It came close this past summer, but the deal fell through.

Pantego Creek also rejected two offers from an O’Neal-backed group to buy the building and land because they came in at less than the property’s appraised value of $1 million.

“If the property is ever sold at fair market value, the proceeds will be reinvested in the community in some manner,” Pantego Creek attorney Arey Grady wrote in an email to STAT. “For instance, Pantego Creek has discussed the possibility of scholarships for local people interested in studying in the health care field and then returning to the area to work in health care — one of just several possibilities.”

With no deal in sight, Pantego Creek voted to tear down the hospital, citing its decrepit state. As a demolition crew prepared to move in, several members of the nonprofit filed suit to stop the wrecking balls.

A judge issued a temporary restraining order in late November — and will decide at Wednesday’s hearing whether the demolition can proceed.

‘You’re likely going to die’

The long fight to reopen Pungo has taken a toll on O’Neal. By his own estimate, he’s poured up to 40 hours a week into saving his town’s hospital.

It’s a battle, he said, that has “financially destroyed” him, considering how much time he’s spent away from his day job. It’s also taken away from time he could have spent with his four sons. But he won’t give up. He won his sixth term as mayor last year.

“I don’t have anything left to lose,” O’Neal said. “In life, sometimes, things are bigger than you are. I ran into something bigger than I am. I can’t let people continue to die.”

He can’t shake the memory of the first death after Pungo’s closure.

The week after the hospital was closed, Portia Gibbs, a 48-year-old mother who lived east of Belhaven, died from a heart attack after a helicopter took more than an hour to lift her to the next closest hospital. Her husband, Barry Gibbs, believed she would have survived had Pungo remained opened. He now worries about what might happen to him.

“If you live in this area, you might as well have the mind-set that if anything happens to your [health], you’re likely going to die,” Barry Gibbs said.

O’Neal is hoping the lawsuit buys a little time. Earlier this month, he scored a meeting with several top state lawmakers after the protest outside the governor’s mansion. Those lawmakers suggested state funding may become available next year to help reopen the hospital.

O’Neal is hopeful, but refuses to get too excited. There’s no saving a hospital next year if the judge green lights the demolition this week. The heartbeat of his hometown hangs on this hearing.

“It’s a matter of life or death,” O’Neal said.