New LG Hospital Owners Inherited Some Surprises

From Two-Year-Old Halloween Decorations Still Up, to Computer Hard-Drives With Holes Drilled in Them, St. Mark’s Was An Eerie Scene

The top staff at Progressive Health Group (PHG) arrived in La Grange last week to begin reopening the former St. Mark’s Medical Center. They’ve got some work to do.

Walking into the building was like an eerie scene from an apocalypse movie. Two years of dust covered every surface. Hardly anyone has been in the place since staff walked out on the last day of business – Oct. 12, 2023. There were still ties hanging on a tie rack. A high school hoodie jacket was left hanging in the emergency room. There were Halloween decorations still out from the time when it closed.

The Record visited the hospital to meet with CEO Quentin Whitwell last Wednesday, Sept. 17. The team from PHG had arrived from their headquarters in Mississippi earlier that week. The automatic doors at the main entrance were not working. They had to be pried open to get inside. It’s just one of many maintenance issues that need to be addressed.

But PHG isn’t daunted.

Whitwell announced later that day his company’s intention to reopen in late January or early February 2026.

Whitwell ran a little late getting to the hospital Wednesday morning – a physician in the area had called him to inquire about the hospital and Whitwell offered to meet while on the way to La Grange.

Upper level staff from PHG, including chief operations officer Lee Flannery, along with some outside partners, gathered around a nursing station to discuss their reopening plans. The building needs a new roof and air conditioning equipment. The prior management removed practically the entire IT system, which will need to be replaced.

The folks from PHG said they were surprised to discover that all of the computer hard drives had been removed and holes had been drilled through them. This was purportedly done for reasons related to patient privacy.

Another setback involves the MRI machine. PHG staff said MRI machines, which cost millions of dollars, require a certain shutdown procedure before they can be turned off. When the hospital closed in 2023, PHG staff said the machine was unplugged without the proper procedure, resulting in damage to the powerful magnet inside. The magnet will need to be replaced at considerable expense.

Otherwise, most of the hospital equipment remains functional, such as x-ray machines, lab equipment and surgery equipment. Everything will need to be sterilized and much of it will need to be recertified.

Roof leaks caused some sheetrock and floor damage in parts of the hospital. Those repairs will need to be made as well.

When Whitwell arrived, his staff brought him up to speed on the work in progress.

Walking along the glass courtyard wall past the cafeteria, Whitwell remarked, “It’s sad when you can’t go to the hospital, especially when you have one this nice. It just went by the wayside for all the wrong reasons.” Whitwell said St. Mark’s first appeared on his radar when someone from his team read a notice about it closing in Becker’s Hospital Review.

“We tried to connect with the board at that time to see if it could be stopped from closing,” Whitwell said. “Unfortunately, we were not able to come to any terms related to a sale at that time.”

St. Mark’s defaulted on its loan in 2023 after years of financial struggles under the management of Community Hospital Corporation (CHC) of Plano. The U.S. Department of Housing and Urban Development (HUD) held the loan and placed the hospital under receivership. HUD entertained offers to buy the hospital, including one from PHG.

“We made a bid with HUD,” Whitwell said. “After reassessing the situation and the closure, and the facility kind of going downhill, we came back with a new bid that they rejected.”

HUD offered the property for sale through a short sale, but PHG was prohibited from bidding since they had previously negotiated with HUD and had some “insider” information. An investor from Georgia bought the note for $806,199.42. The unpaid balance on the note at the time was more than $12 million.

“It sold for one-third of what we had offered,” Whitwell said. “Then we ended up buying it for the same price we had originally offered. So that’s kind of how it transpired. Basically we stayed on it from the get-go and never gave up.”

“Initially, we’ll have the emergency room back open, pharmacy, laboratory, all the imaging,” Whitwell said.

Whitwell said Progressive plans to convert the old birthing center into a rural health clinic – essentially a primary care doctor’s office within the hospital. The clinic will offer wound care services, physical therapy and intensive outpatient therapy.

Whitwell spoke to the La Grange Rotary Club later that day. There, he talked about how entrepreneurship relates to hospital management.

“If there’s dead space at a hospital, I’m going to figure out a way to make them make money,” he said.

Whitwell said PHG will probably convert the old gift shop into a retail pharmacy – something that has been very successful in other hospitals they operate.

When the hospital reopens (under a new name – Progressive Health of Fayette), it’ll continue under the designation as a Rural Community Hospital (RCH). The RCH designation provides a $3.5 million annual federal subsidy for maintaining a rural emergency room. However, the designation limits the amount of inpatient services that can be offered. RCH facilities must maintain an average inpatient stay of less than 24 hours. Accordingly, the hospital will not need the 65 beds it was originally designed and built for.

Whitwell said PHG will look to convert some of that space to cash-generating enterprises.

“We’ll probably create some kind of a wellness spa and do some more cash products – botox and aesthetics and things of that nature,” he said.

In his address to the Rotarians, Whitwell made another big announcement.

“I think it’s fair for me to announce to you, we don’t have anything in writing, but we have been offered to affiliate with Texas A&M University on this project, and we’re meeting with them again tomorrow,” he said.

Whitwell said his company places a big emphasis on customer service.

“Our goal is to be the Chick-fil-A of rural health care,” Whitwell said. “... If you don’t enjoy what you do, you don’t enjoy the people that you serve, it’s going to reflect on the hospital as well. And so that’s kind of our goal.”

Whitwell said PHG plans to hire 60 to 75 full time staff and another 60 to 75 part time staff at the hospital.