March 1, 2010 -- A hand as tiny as a budding leaf punched at the air inside a baby incubator.

Kelley Smith, the head nurse of the neonatal intensive care unit at The Regional Medical Center at Memphis, checked on the little fighter.

This is a 23-weeker who has been here since November, Smith said. This is the smallest gestation age that has any chance of survival. As you can see, she is a big girl now.

The baby had grown from 1.4 pounds to 3.5 pounds.

Here at the Sheldon B. Korones Newborn Center, almost 50 other babies wailed, smiled and struggled for life. The center is one of several specialty hospitals within The MED, the county-owned institution struggling for its own survival.

These Centers of Excellence provide care that private hospitals in the Mid-South region have traditionally avoided because of expense and risk. The MED serves the tiniest babies, the badly burned, the traumatically injured, AIDS patients, diabetics with stubborn wounds, the sickle-celled and women with complicated pregnancies. And it serves the poor.

Its mission as a safety-net hospital often overshadows its specialty centers. For decades, the public has perceived The MED as the hospital of last resort.

During that time, competing hospitals have expanded and aggressively worked to increase their market share  sometimes with the backing of public fundraising campaigns. The MED has stagnated, depending on tax subsidies, while its insured patient numbers have faltered.

Now with the state making sharp cuts in health care spending, The MED is in such a state of financial jeopardy it may have to close. Meanwhile, it's a teaching hospital for the University of Tennessee Health Science Center, and its trauma center is a place for orthopedic innovation.

"I was one of those people who thought I would never need The MED, said Kelly Bolton Jordan. I didnt even know where it was.

But when the vice president and financial adviser from Merrill Lynch became pregnant and was diagnosed with a potentially life-threatening condition, she depended on The MED for care.

If I was to die, we were going to lose (my daughter)," she said. "If they took her too early, her chances each day and each hour and each minute ... gave her less of a fighting chance.

She succeeded in giving birth to Whitney, who weighed one pound and 10 ounces. The girl is now a healthy 9-year-old.

Jordan gushes when she talks about The MEDs green beret of nurses, a term coined by her husband. She said her daughters doctors were among the best in the nation. The surroundings, however, belied the level of expertise at The MED.

I will tell you that the MED rooms, at that time, were nothing like other hospitals, Jordan said. It didnt have hardwood floors. It didnt have a VCR. It didnt have a TV that worked initially. And my husband sat in a broken chair. It didnt matter. It didnt matter one bit. I had the best doctors and nurses that I think exist.

The rooms are still almost all semi-private, and the neonatal intensive care unit (NICU) remains stuck in time. Its an old-fashioned baby ward with incubators squeezed into a big room.

Families cannot stay with the newborns. If they want to be close, they have to make do with a small waiting room that has two recliners, nine metal lockers, nine chairs and no window.

The NICU has a larger percentage of insured patients and a more reliable payment stream than some other areas of the hospital. Even if babies are not covered by private sector insurance policies, many still qualify for TennCare or CoverKids. These state insurance programs do not cap coverage, so the hospital can continue receiving payments throughout the extended stays of premature and low-birth-weight babies.

This reliable payment stream could soon be siphoned. One block away, the new Le Bonheur Childrens Medical Center will open this year with a 60-bed NICU. These beds have private rooms that allow parents to stay with their babies.

In the past, Le Bonheur has limited its NICU to babies needing surgery. When the new hospital opens, it will focus more on feeders and growers, the tiny babies who need more time and nourishment before they can be released.

The MED did not oppose Le Bonheur when it obtained a Certificate of Need from the state of Tennessee for its new hospital and the expanded NICU, said Jim Christoffersen, deputy general counsel of the Tennessee Health Services and Development Agency.

That Le Bonheur project was a real feel good project, Christoffersen said. Whatever disputes there may be among systems, that wasnt something that was opposed.

The MED can send babies born at its High-Risk Obstetrics Center directly to its NICU. About 25 percent of the 5,000 babies born at the center are considered high risk. However, a mother has the option of having her baby transferred.

When many Memphians discuss hospitals, a common comment about The MED and its Level 1 trauma center is to get stabilized then go somewhere else.

I had heard some horror stories about The MED, said Henry Sexton.

But Sexton said he received excellent treatment after being transferred to The MEDs trauma center last August.

I accidentally stabbed myself three and a quarter inches deep, he said. I carry what is marketed as being one of the worlds sharpest knives and I can attest to it.

The stab wound had cut a ligament that supports the bottom of the liver, and Sexton was bleeding internally. Surgeons had him in the operating room within 20 minutes of his arrival.

Ive never received any service at any hospital before like I received at the trauma center, he said. It was just phenomenal.

During an eight-day stay at the hospital, he recalled having to ring for a nurse only once.

I think its asinine to let such a valuable resource go under for a few tax dollars, Sexton said. My understanding is that the state is collecting an awful lot of money that they are not giving back to The MED that they are using in other areas. I dont understand that at all.
Understanding the hospitals finances is difficult because the financial baseline keeps shifting.

The hospitals board of trustees in 2008 brought in FTI Cambio, a health care consulting company, to make The MED more financially viable. FTI Cambio reduced staff, cut supply chain costs and other expenses and began spinning off the hospitals satellite clinics as part of a comprehensive overhaul.

The measures resulted in savings of more than $20 million in annual operating costs.

However, those benefits were never fully realized because of funding cuts from the state. The state during its current fiscal year, which ends June 30, cut $6.5 million for The MED.

The cuts would have been more had they not been offset with federal stimulus money from the American Recovery and Reinvestment Act.

Now, the flow of the one-time federal stimulus money is diminishing and the state is cutting another $200 million from TennCare on top of $170 million in cuts from the prior year.

These cuts fester because of a compounding effect. The federal government typically matches with more money what Tennessee spends for TennCare, its state Medicaid program.

Although the final impact on The MED has yet to be determined, the hospital could lose as much as $52 million.

Were talking close the door, said Joel Kimbrough, a hospital trustee who chairs The MEDs budget and finance subcommittee.

News of the additional state cuts came Feb. 1, just after The MED had secured an additional $10 million from Shelby County  money that officials hoped to leverage to obtain another $22 million from the state.

Before Gov. Phil Bredesen announced the latest round of state funding cuts, the magic number for The MED was $32 million. That was the goal for increased yearly funding that the hospital administration set in October when they released a five-year plan.

Without the additional $32 million, hospital officials said they would have to shut down emergency room services as early as this month. The proposed elimination of 19 beds in the emergency department and another 70 beds in the surgical department was postponed after the county came up with an additional $10 million, putting the countys total annual support at $37 million.

The Elvis Presley Memorial Trauma Center is separate form the hospitals emergency room. The Trauma Center and the Firefighters Regional Burn Center would have remained open.

But the cuts announced this month by Bredesen could result in the closure of the entire medical center. The governors proposed budget retains $172 million in TennCare reserves.

Tony Garr, executive director of the Tennessee Health Care Campaign, a consumer advocacy group, said he believes more money should be taken from the reserves to lessen the cuts.

Thats money thats going to be there sitting in the state coffers not being used, Garr said.

Reserves are necessary because health spending budgets are based on projections that could change, said Kelly Gunderson, director of communications for TennCare. She said the state has already dipped into the reserve fund, which stood at $598 million in 2007.

The Tennessee General Assembly will ultimately decide on a state spending plan for the next fiscal year, but Bredesens proposed budget is the starting point. It may seem far-fetched for a hospital to ask for a brand-new facility when it is losing money, but thats what The MED has done.

The current complex is a conglomeration of buildings constructed between 1947 and 1994. The MED encompasses about a million square feet and has multiple entrances.

Hospital officials say to be cost-effective long term they need a smaller, 420,000-square-foot structure with 310 beds.

This new hospital would be built to better withstand an earthquake. Angie Herron, manager of communications at The MED, stood inside the trauma center and looked up.

Not only are the floors physically on top of us, she said, there is a piece of the building that stands out on stilts and concrete. The helicopter pad is up there. If there was an earthquake of the magnitude that there could be, that could collapse and basically crush the trauma center.

Hospital officials have estimated that a new structure would cost about $318 million.

But for now, they are primarily concerned with simply keeping the hospital open.

One sore point with local officials is the governors power over the distribution of federal money that is supposed to reimburse publicly owned hospitals for uncompensated care. Shelby County Commissioner Mike Ritz has been particularly critical of how Bredesen has chosen to use the money. Ritz wrote a letter to Shelby County legislators in late January urging them to take a hard look at the issue.

He followed up by filing an official complaint with the U.S. Department of Health and Human Services' Office of Civil Rights on behalf of minority populations in Shelby County who depend on The MED for health care and employment.

Tennessee recently received an annually payment from DHHS of over $200 million for uncompensated care, Ritz wrote. Of that amount DHHS sent to Tennessee, $81 million (was) based on the uncompensated care at The MED alone.

"However, Tennessee has forwarded to The MED total supplemental care payments of $29 million to $39 million a year. Therein lies my complaint against the state of Tennessee.

Ritz' action resulted in officials from the governors staff, at least temporarily, ending negotiations for funding The MED. The action also frustrated other local officials because Ritz did not forewarn them of his intentions.

Shelby County Commissioner Deidre Malone sharply questioned Ritz about the action and said she believed in speaking through the legislative process. Ritz and Malone are members of the MED Task Force appointed by Interim Mayor Joe Ford that meets every Thursday to brainstorm ways to save the hospital.

One initiative of the task force is to spur public support for The MED through a Web site, a series of town hall meetings and a three-minute television public service announcement.


Kelley Smith, head nurse of the neonatal intensive care unit at The Regional Medical Center at Memphis, checks on Tiana Bell, 5 days old, who was born at 32 weeks old. Photo: Lance Murphey

The Web site, www.saveourmed.com, has been launched. It tells the history of The MED, contains information about the hospitals specialty center, posts the dates and places for the town hall meetings and has an option for people to make online donations.

Individual donations will support The MEDs missions, but a long-term funding solution will have to come from Nashville or Washington.

The MED may be one of the most threatened hospitals, but it is not the only hospital that will be affected by the proposed TennCare cuts.

The Tennessee Hospital Association has actually proposed a one-year coverage fee on its members to help fill a $540 million gap in hospital reimbursements. The money raised through the fee would be leveraged to secure matching federal dollars, but the plan requires approval by the Legislature and the Centers for Medicare & Medicaid Services.

MED officials said implementing this coverage fee could save the hospital from closure.

However, even if The MED survives, it may have to eliminate programs. Hospital officials in their five-year-plan also warned that they may have to close the MedPlex and all ambulatory services.

The MedPlex provides primary physician care, including services to people with special needs. It is home to the Diggs-Kraus Sickle Cell Center and the Adult Special Care Center, which provides case management to people with HIV/AIDS.

If the largest provider of HIV AIDS care were to no longer exist, it would be devastating to the people, said Kim Daugherty, executive director of Friends for Life. Where would they get that service? There would have to be other providers found. They may not be attached to hospitals. It becomes very complicated.

Another specialty center at The MED is The Wound Center, which has the only multi-place hyperbaric oxygen chamber in the state. The massive metal capsule is 28 feet long and eight feet wide. It allows patients to better breathe and process oxygen, which aids in wound healing.

Were the only unit that does critical care, said Bud Rannou, manager of the hyperbaric medicine unit. Were on call 24-7 for after hours. We do any patient who may be ventilated on monitors, IV pumps and different things like that. All the other equipment goes in the chamber with them.

The hospital began using the chamber in February 1993. It is used to treat people with a wide range of conditions, including burn victims and diabetics.

We like to say we have the biggest and best, Rannou said. Not a lot of people realize it or know about it, but its here.

A specialty center that does receive a great deal of public attention is the Firefighters Regional Burn Center. It serves the entire Mid-South and beyond with highly specialized care that is expensive to provide.

In 2004, there were 132 burn centers in the nation, the Associated Press reported. Today, there are about 125.

Kitty Vineyard of the Chicago-based American Burn Association said the centers typically treat a high number of uninsured patients, and patients require extended stays with multiple surgeries.

Stays average about one day for each percent of body surface burned, said Jane Walker, nurse manager at The MED.

We had a man who just left here who had been here since September, Walker said.

The unit has 14 beds and specialized treatment and operating rooms.

All of the rooms have their own heating system so we can heat the room, she said. Our hydro is very hot back there and our operating room is the only operating room in the hospital that is heated. If you dont have skin covering your body, then your body cannot thermo-regulate its own temperature.

Surgical teams wear ice-pack vests because surgeries can last as long as 12 hours. But the care the staff provides goes beyond the clinical.

Part of the nurses job is to be there with patients the first time they look in the mirror, Walker said.

Kipp Yarbro said he is a Bartlett firefighter today because of the treatment he received at The MED. He became a full-time firefighter for the city one year after suffering burn injuries to both hands during a grease fire at his home.

The burn was so bad they actually had to go in and put artificial tissue into the palm of my right hand, Yarbro said.

Dr. William Hickerson, the burn surgeon, really knows his stuff, he said.

Hickerson was also at The MED 21 years ago when Pat Ocasio stayed there for 41 days. She lost the use of much of her right hand and had to have part of her lip reconstructed. Ocasio said she will never forget the comfort Hickerson gave her during a tough period.

I got home from the hospital a couple of months after (my) accident and, of course, you could still see my face because he was still doing surgery on it, Ocasio said. I was going into Walgreens and I was just fixing to get out of the car, and this lady turned around and said What are you doing going out looking like that?

Ocasio broke down in tears, and her niece drove her back home.

The next thing I knew, my niece had called Dr. Hickerson, she said. He was on the phone with me, saying, Sweetheart, dont worry about people like that. Thats her problem. Theyre not pretty inside or outside and you are.

The doctors at The MED will soon have one of their own to lead the hospital.

Dr. Reginald Coopwood, a surgeon who resigned as chief executive officer of the Metropolitan Nashville Hospital Authority to come to Memphis, begins his duties March 1  the day FTI Cambios management contract ends.

The hospital board is counting on Coopwood to usher in a period of stability after several years of leadership turnover. During his interview with the hospital board, he said he believed that publicly owned, safety-net hospitals would eventually have to transition into a different model.

Coopwood said he didnt yet know what that model would be, but that he looked forward to learning more about The MED.