Georgia abandons its rural hospitals

How do you rescue Georgia’s rural hospitals — often the heart and soul of the communities that they serve — from the financial challenges that are forcing them to close their doors forever?

Apparently, you don’t. If you’re the state of Georgia, you express insincere concern for their health, slap a Band-Aid on their gaping wounds and push them out the door to face the ugly future that awaits them.

Back in March — and back when he still had an election to win — Gov. Nathan Deal claimed to be so concerned that he appointed a special committee to study the problem and recommend potential answers. In its report released Monday, the panel acknowledged the seriousness of the situation, noting that “four rural hospitals have closed in recent months with a total of eight having closed or attempted to reconfigure in the last two to three years. Additionally, 15 rural hospitals are considered financially fragile, with six operating on a day-to-day basis.”

But the panel does not propose a cure. In fact, it doesn’t even make a real attempt at a cure. It offers one proposed policy change of such a small scale that it amounts to a hospice program, slightly easing the pain that will come as those hospitals close their doors.

It doesn’t have to be that way, but the one proposal that might have made a difference — Medicaid expansion through the Affordable Care Act — was taken off the table by the governor from the beginning. With an influx of newly insured Medicaid patients, those hospitals would at least have had a fighting chance of paying their bills and staying open.

The contrast with southern states such as Kentucky and Arkansas, which did accept Medicaid expansion, is stark. As Gallup notes, the two states have cut the percentage of their citizens who don’t have health insurance in half. As a result, once-struggling rural and urban hospitals in both states have regained their footing. A new study of Kentucky’s experience by business consultants at Deloitte, for example, found a dramatic decrease in the amount of “uncompensated care” that Kentucky hospitals have been forced to provide.


As Deloitte noted:

“During the first three quarters of 2013, uncompensated billed charges totaled $1.9 billion. However, in the first three quarters of 2014, when Medicaid expansion began in Kentucky, uncompensated charges totaled $766 million, a decrease of $1.15 billion.”

In a state 40 percent the size of Georgia, uncompensated care that hospitals were forced to “eat” dropped by more than $1 billion. Imagine the impact of a similar infusion here in the Peach State.
In the report, Deloitte also documents other economic, medical and social benefits enjoyed by Kentucky as a result of its decision. The net economic impact of Medicaid expansion through 2021 is now projected by Deloitte at $30 billion, double the projection of a year ago. In 2014 alone, Medicaid expansion injected an additional $1.6 billion into Kentucky’s health-care economy. More than than 12,000 jobs, including 5,400 health care sector jobs, were created by Medicaid expansion last year. Deloitte now projects that by the end of 2021, some 40,000 jobs with an average salary of $41,000 will be created in Kentucky as a result of Medicaid expansion. None of that is happening in Georgia.
And of course, hundreds of thousands of Kentucky citizens now have access to the medical care that will help them live longer, happier, healthier and more productive lives. How much is that worth?
What could possibly be more important?

Finally, it’s crucial to point out that despite our economic challenges, Georgia (median household income of $47,439) is still considerably more prosperous than either Kentucky ($42,158) or Arkansas ($39,919). In other words, our failure to do our part on Medicaid expansion is not a matter of can’t.

It’s a matter of won’t.

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