A group of roughly 30 physicians in white coats filled a Mobile City Council meeting this week as leaders of AltaPointe Health System defended the nonprofit’s mental health work amid a proposal that would shift $200,000 of its city funding to a separate veterans’ recovery program.
AltaPointe has for several years received a $600,000 performance contract from the city of Mobile to support operations at its EastPointe Hospital in Daphne, which treats indigent patients referred by the Mobile County Probate Court. A proposed amendment to the city’s fiscal year 2023 budget, introduced by District 6 Councilman Scott Jones, would cut that contract to $400,000 and redirect the remaining $200,000 to Veterans Recovery Resources, a Mobile-based facility that provides addiction recovery and mental health services to veterans, first responders and their families, along with indigent patients.
AltaPointe Chief Medical Officer Dr. Sandra Parker told council members the proposed cut would hurt the hospital’s ability to treat patients who cannot pay for care. She said a majority of patients at EastPointe Hospital are uninsured, and that caring for those indigent patients already costs the hospital about $4 million a year in lost revenue.
“We find it discouraging that now, with the rate of depression skyrocketing in our community, that anyone would consider reducing our budget,” Parker told the council. “We don’t mind anyone else getting money, but what we don’t want is to have our money reduced. Let us keep our money to serve our patients.”
District 2 Councilman William Carroll pressed Parker on what specifically would be lost if the funding reduction is approved. Parker said the cut would directly limit the hospital’s capacity to admit patients and could ultimately require staff reductions at a facility already operating with tight margins.
AltaPointe CEO Tuerk Schlesinger, responding to questions from Jones, said the organization receives about $75 million a year in combined federal and state grant funding and serves as the primary depository of state mental health dollars for Mobile, Baldwin and Washington counties. Despite that scale, Schlesinger said AltaPointe operates on thin margins, netting roughly $450,000 in profit annually while still struggling to fund employee raises and fill about 200 vacant staff positions.
“Two hundred thousand dollars would pay for 12 or 13 nursing assistants,” Schlesinger said, framing the proposed cut in terms of direct patient-facing staff.
Schlesinger acknowledged under questioning that AltaPointe had, within the previous two weeks, possibly turned away patients because of limited bed space. He maintained that the organization is meeting the terms of its performance contract with the city by continuing to serve patients referred through the Mobile County Probate Court, even as the arrangement runs at a loss. He put the hospital’s total losses tied to those services at roughly $9 million.
“Seventy-one percent of our patients are uninsured,” Schlesinger said. “We have to piece together revenue to make that hospital work.”
Supporters of shifting funding toward Veterans Recovery Resources argued the smaller nonprofit fills a distinct need. John Kilpatrick, the organization’s founder and owner, told the council his program has grown from a single employee in 2019 to 29 staff members today, and that about 80 percent of the patients it serves are unable to pay for treatment. Kilpatrick said his organization is well positioned to help address the region’s mental health needs, particularly among veterans and first responders.
“VRR is part of the solution,” Kilpatrick said. “We ask you to approve the amendment to the budget and allow funding to VRR.”
The debate reflects a broader tension facing the council as it finalizes the city’s annual spending plan: balancing support for an established provider that already receives substantial state and federal money against a newer organization built specifically to serve veterans and first responders, a population advocates say is often underserved by larger systems.
Following the regular meeting, the council held a second finance committee session to continue discussing the budget amendment. The spending plan is scheduled to return to the full council’s agenda at its meeting on Tuesday, Sept. 27, when members are expected to take up the funding question again before finalizing the fiscal year 2023 budget.