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Company aims to buy and restore struggling rural hospitals in Tennessee

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Kyle Kopec uses his phone to illuminate a cabinet of medical supplies in the shuttered Decatur County General Hospital.

Kyle Kopec uses his phone to illuminate a cabinet of medical supplies in the shuttered Decatur County General Hospital. His company, Braden Health, is taking over the facility with a pledge to invest $2 million to reopen it. Blake Farmer/WPLN News

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Kyle Kopec recently gave a tour of some of the run-down hospitals his company is snapping up, pointing out relics of poor management left by a revolving-door procession of operators.

The attic at Houston County Community Hospital in the town of Erin, Tennessee, about a 90-minute drive from Nashville, houses a ham radio system that didn’t get much use. On the roof, Kopec pried open a panel on the giant HVAC unit, the only place the thermostat could be adjusted. And inside, he pointed out a newly renovated emergency room that had doors too narrow for a gurney. 

“If you’d like, we can try and wheel that bed through and see what happens,” Kopec said. An old operating room is temporarily housing the ER while Kopec’s company, Braden Health, works on renovations.

Coming out of the pandemic, many rural hospitals — including Houston County Community Hospital — are in even rougher shape than before. So rough, that some are now practically being handed to investors who say they can make them profitable again.

Braden Health is one of those companies.

Kopec, whose official title is chief compliance officer, bounced through halls, greeting nurses and clerical staff by name. He has a confidence that belies his age and experience. Kopec’s just 22, a year out of college, and leading the acquisition of businesses that are critical to these towns — the local hospital. 

Braden Health has four hospitals in West Tennessee at varying stages in the acquisition process. Its first, in Lexington, Tennessee, has remained open since it was purchased in 2020.

“They’re not the most complicated things in the world,” Kopec said of these hospital deals. “But if you don’t know exactly how to run them, you’re just going to run them straight into the ground.”

Houston County Community Hospital in Erin, Tennessee, is being taken over by Braden Health, which is building a mini network of facilities in West Tennessee. (Blake Farmer/WPLN News)

The mayor of Houston County, James Bridges, said he agrees. His county bought the local community hospital in 2013 for $2.4 million in order to prevent permanent closure.

“We had no business being in the hospital business,” Bridges said. “The majority of county governments do not have the expertise and the education and knowledge that it takes to run health care facilities in 2022.”

Those with the most experience — like big corporate hospital chains based nearby in Nashville — have been getting out of the small hospital business too, so communities have seen a revolving door of managers. Some even got in trouble for shady billing practices

In nearby Decatur County, where Braden Health is also taking over, the previous operator has been indicted on theft charges.

“You’re looking to someone who supposedly knows what to do, who can supposedly solve the issue. And you trust them, then you’re disappointed,” said Lori Brasher, who sits on Decatur County’s economic development board. “And not disappointed once but disappointed multiple times.”

Brasher said she has much more confidence in Braden Health, which she said has concrete plans for reopening. But local residents still have trouble stomaching the sticker price. Decatur County agreed to sell its hospital for $100. The deal for Houston County was just $1.

Braden Health said hospital cleanup and renovations will cost millions. At Decatur County General, the deal requires Braden Health to invest at least $2 million into the facility.

On a tour of the shuttered hospital, abandoned by the former owner two years ago, Kopec unlocked a walk-in freezer that reeked of rotting meat.

“If you look at the bottom, those are a bunch of dead maggots that didn’t make it out,” he said. The smell of mold filled the halls. Pipes froze and burst while the building was uninhabited.

Most of the funding for restoring these facilities comes from Dr. Beau Braden, who founded Braden Health.

Dr. Beau Braden (left) and Kyle Kopec (right) of Braden Health speak with nurses gathered at the front desk of Houston County Community Hospital, which the company is taking over. (Blake Farmer/WPLN News)

“I understand the perspective that a lot of people would have, that thinks that it’s worth a lot more,” he said of the hospitals his company is taking over. “But if you look honestly at a lot of transactions that take place with rural hospitals and how many liabilities are tied up with them, there’s really not a lot of value there.”

Braden is an emergency physician who was trying to build a new hospital in Ave Maria, Florida, where he owns a large rural clinic. But after running into regulatory roadblocks, he saw more opportunity reopening hospitals — which brought him to Tennessee, which has one of the nation’s highest concentrations of closed and distressed hospitals. The state has experienced 16 closures since 2010 — second only to the far more populous state of Texas, which has had 21.

In West Tennessee, Braden’s aiming to build a mini network that could share staff and supplies as needed. Braden said he can understand any skepticism, even from the employees.

These aren’t the first turnaround promises Jennifer Warren, facilities manager at the Houston County hospital, has heard.

“Don’t get me wrong, I know that the citizens — and I even was one of them — that didn’t want to come here because it was going down,” she said, adding that she chose to make the 70-mile drive to Nashville in order to receive care.

Under a previous company, Warren said she wasn’t allowed to make basic purchases to maintain the building — even for tools as small as a sander. Now, Warren said, she has a budget to make the hospital a place where she and others would actually want to be treated. 

“The fact of it is,” she said, “my mind has been changing.”

Correction (March 24, 2022): A previous version of this story misidentified Kyle Kopec.

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