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Levi Hospital board votes to wind down inpatient services and form community health foundation
Summary
Levi Hospitalboard unanimously approved a plan to close inpatient operations and transition the hospital into a community health foundation focused on behavioral health and social determinants of health; hospital counsel and CEO told the Hot Springs Board of Directors the decision was strategic and not triggered by insolvency.
The Levi Hospital board of directors voted on May 8, 2025, to wind down inpatient hospital operations and convert Levi into a community health foundation focused on behavioral health and social-determinants services, hospital legal counsel Linda Johnson told the Hot Springs Board of Directors on July 15.
The decision "did not come from financial distress at all. In fact, 2023 and 2024 were the strongest financial years in Levi's history," Johnson said, adding the board acted to preserve resources for long-term community benefit.
The board and hospital CEO said the physical condition of Levi's 300 Prospect campus made renovation impractical. Johnson cited safety incidents and deferred maintenance; she told the board the estimated cost of a partial remodel had grown to nearly $25,000,000 and "exceeded the book value of the hospital." The board later approved a smaller, $18,000,000 plan focused on behavioral-health services but said uncertainty about future Medicaid reimbursement undermined that path.
Levi CEO Mr. Jeffers told the board the hospital kept the timing of the decision confidential to avoid an exodus of staff. "Our primary concern throughout this process has been keeping it under wraps until we're ready to release the information to our employees because our main risk was staff finding out that the hospital is closing from someone else other than us and, and leaving," Jeffers said.
Johnson said the board concluded the hospital could deliver the greatest long-term community benefit by converting to a foundation that would fund behavioral-health programs and services addressing housing instability, medication adherence and outpatient continuity. She described internal patient-discharge data showing about 1,200 discharges in 2024, roughly 800 unique patients and a subset of about 200 patients who readmitted repeatedly; the board tied those readmissions in part to unstable housing.
The hospital has begun donating supplies and equipment and is working on employee severance and transition plans, Johnson said. "Levi Hospital is closing in the strongest financial position in its history so that it can pay severances to its employees, meet its obligations, and provide the Levi Foundation the most resources possible to achieve its mission," she said.
Mayor Pat McCabe told the board he received a cease-and-desist email and later hard copies in early July from Levi's counsel regarding public comments by the former CEO; Johnson said the cease-and-desist letter was issued privately and was not a public document under the Freedom of Information Act, a characterization she made to justify its limited distribution. McCabe told the board he received the email at 3:03:47 p.m. on Thursday, July 3, and that paper copies arrived the following Monday.
Board members and officials at the meeting raised operational concerns for area emergency services and hospitals. One director said the July 4 weekend required 19 psychiatric transports to licensed acute psychiatric programs as far away as Jonesboro and said longer round-trip transport times can tie up local ambulances and complicate court-ordered admissions. Jeffers said he had discussed capacity with local EMS, which told him it could approximately double psychiatric transport volume if needed.
Board members pressed officials on regulatory compliance and billing. Johnson said there were no pending compliance matters that drove the board's decision. "There was no compliance related issue that factored into the board's unanimous decision," she said. She acknowledged past repayments and routine compliance reviews but denied that the conversion was an effort to avoid repayment obligations.
The Levi Foundation board has invited the city to collaborate on preserving the buildingincluding the historic thermal pooland on future programs for vulnerable residents, Johnson said. The hospital's future role in direct inpatient psychiatric care will be replaced by partnerships with larger health systems and community-based programs, she added.
No formal action by the Hot Springs Board of Directors was taken on Levi Hospital at the July 15 meeting; the discussion was presented as informational and was not on the consent or action agenda.
