Rural hospitals struggle in states that declined Obamacare

More than half of all rural hospitals in Mississippi, South Carolina, Georgia and Oklahoma lost money from 2011 through 2017.

In Kansas, the bloodletting was even more widespread.

Two out of three rural hospitals in the state operated in the red during the seven year period.

What these states also have in common is that legislators voted against expanding Medicaid under the Affordable Care Act, which would have provided coverage for hundreds of thousands of uninsured residents and bolstered rural hospital bottom lines.

Fiercely conservative and inherently distrustful of the federal government, state politicians balked at picking up 10 percent of the Medicaid expansion tab and repeatedly expressed fears that Washington bureaucrats would renege on generous Obamacare funding, leaving states to cover an ever increasing share of the healthcare burden.

That hasn’t happened yet. In the meantime, residents of deep red rural America — farmers and farm workers, small business owners and their employees, the old and irfirmed — are seeing their hospitals founder and close.

“The irony to me,” said John Henderson, who heads The Texas Organization of Rural & Community Hospitals and supports Medicaid expansion, “is that we’re paying federal income taxes to expand coverage in other states. We’re exporting our coverage and leaving billions of dollars on the table.”

While experts agree embracing Obamacare is not a cure-all for rural hospitals and would not have saved many of those that closed, few believe it was wise to turn the money down.

The crisis facing rural America has been raging for decades and the carnage is not expected to end any time soon.

High rates of poverty in rural areas, combined with higher than average unemployment, aging populations, lack of health insurance and competition from other struggling institutions will make it difficult for some rural hospitals to survive regardless of what government policies are implemented.

For some, there’s no point in trying. They believe the widespread closures are the result of the free market economy doing its job and a continued shakeout would be helpful. But no rural community wants that shakeout to happen in its backyard.

“A hospital closure is a frightening thing for a small town,” said Patti Davis, president of the Oklahoma Hospital Association. “It places lives in jeopardy and has a domino effect on the community. Healthcare professionals leave, pharmacies can’t stay open, nursing homes have to close and residents are forced to rely on ambulances to take them to the next closest facility in their most vulnerable hours.”

Origins of the crisis

The nation’s current system of rural hospitals dates back to the 1940s and the belief that every town deserves a modern facility.

But with the rapid development of healthcare technology, the supply and demand for healthcare services shifted to urban areas.

“Most of what we knew how to do in the 1970s and 1980s could be done reasonably well in small towns,” said Dr. Nancy Dickey, president of the Rural and Community Health Institute at Texas A&M. “But scientific developments and advances in neurosurgery, microscopic surgery and the like required a great deal more technology and a bigger population to support the array of technology specialists.”

The number of services rural hospitals could provide consequently shrunk, and hospitals didn’t need as many beds, Dickey said. At the same time, rural populations began to decline as jobs dried up and younger folks moved away.

That left rural communities with older, poorer populations and a greater number of uninsured — financially challenging demographics that forced more than 180 rural hospitals to shut down in the 1990s alone.

Alarmed by the closures, politicians responded by passing legislation that included the creation of the Critical Access Hospital designation, ensuring that a select group of rural hospitals would have all of their costs covered for Medicare patients.

The new laws contributed to a significant drop in closures during the first decade of the 21st century. But when the Great Recession hit, many rural hospitals found themselves in another deep financial hole. Closures began rising again — a trend that has not relented despite the economic rebound.

“If you don’t take the expansion,” said Dickey, the Texas A&M professor, “it’s a challenge to make sure you have enough paying patients coming through the door.”

Lack of coherent policies

Looking at the data, it’s hard not to conclude that hospitals in non-expansion states are suffering far worse that those that embraced Obamacare.

They account for 77 of the 106 closures over the past decade. They also are home to a greater percentage of money losing facilities and lower profit margins.

But for most of these states, refusing Medicaid is not their only problem.

Most have higher poverty rates and more hospitals concentrated in adjacent geographical areas. Many also lack coherent statewide policies to address the crisis.

Texas, for instance, experienced 17 closures since 2010 — the most in the country, according to the Sheps Center for Health Services Research at the University of North Carolina in Chapel Hill. But practically all of them were located in the eastern and southeastern parts of the state.

These are small agricultural communities, explained Henderson, who heads The Texas Organization of Rural & Community Hospitals. The population is generally poorer and the hospitals are closer to each other.

By comparison, hospitals in West Texas are further apart. They have less competition, and they are often supported by property taxes connected to the oil and gas industry. When oil prices are up, hospitals in these communities have access to more resources, Henderson said.

Like Texas, the fate of rural hospitals in Kansas often depends on what local resources they have to draw on.

“Because many of our hospitals are affiliated with local governments, each locality might take a different approach,” said Kari Bruffett, the Kansas Health Institute’s vice president for policy.

It’s clear those approaches aren’t working.

Not only have five Kansas hospitals shut down since 2010, but seven more are counted among the 20 worst performing rural hospitals in the country. They include Kiowa County Memorial Hospital in Greensburg and Morton County Hospital in Elkhart, which both lost more than $17 million between 2011 and 2017.

For some academic researchers and politicians in conservative states, there are good reasons for the failure of rural hospitals and the free market should be left to decide the winners and losers.

Navigant, a Chicago-based healthcare consulting firm, recently published a report stating that 153 of the 430 unstable rural hospitals in the United States are “not essential.” If they went down, their communities would find other ways of meeting residents’ needs.

That conclusion is supported by a 2015 Harvard University study that looked at 195 hospital closures between 2003 and 2011 and found that, while patients had to travel further after a shutdown, death rates and other key indicators of quality healthcare did not worsen.

But George Pink, deputy director of the North Carolina Rural Health Research Program, isn’t convinced the free market is the best model for rural America.

“Healthcare has shown itself many times over to be a market that regularly fails,” Pink said. “If you think of a small, rural community, miles from anywhere else, you wouldn’t expect the market to jump in and provide solutions. Think about the high percentages of poor, chronically ill, elderly, and disabled in these towns. These are not people with a lot of political power.”.

Urban and rural working together

While hospitals in most states that declined to expand Medicaid are struggling, Utah provides a notable exception.

“Twenty years ago, we instituted a policy where we would take a little money from urban hospitals and give it to rural hospitals,” said Dave Gessel, executive vice president of the Utah Hospital Association. “That’s provided a base for all our hospitals.”

Utah also has a diversified and growing economy, a low poverty rate and a tradition of donating generously to charity, Gessel said, and rural hospitals have been successful in attracting experienced executives from bigger markets.

He added that the Mormon church provides a unifying influence.

“Rural Utah is pretty heavily Mormon,” Gessel said. “Because of those connections, those ties, local residents realized if they didn’t come together, things could get really bad.”

As a result, only three rural hospitals in Utah reported losses from 2011 through 2017, and collectively its 21 hospitals logged the highest profit margin in the country.

Pink, the professor at UNC’s Sheps Center, said several other states have taken novel approaches to addressing the crisis. Louisiana recently passed the Rural Hospital Preservation Act that supports rural hospitals with wrap around funding, and North Carolina is about to follow its lead.

“These are useful initiatives,” Pink said. “But I don’t know of any hospital that’s opposed to Medicaid expansion. It’s good from a financial standpoint. But more importantly, it provides access to healthcare for vulnerable people.”

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3 states with the most rural hospital closures

Of the 27 states that have seen at least one rural hospital close since 2010, those with the most closures are in the South, according to research from the North Carolina Rural Health Research Program. For its analysis, the NCRHRP defined a hospital closure as the cessation in the provision of inpatient services. As of June 17, all of the facilities listed below no longer provided inpatient care. However, some of them still offered other services, including outpatient care, imaging, urgent care or rehabilitation services. Since 2010, 107 rural hospitals have closed. Here are the three states with the most rural hospital closures since 2010, according to the analysis: 1. Texas — 17 hospitals 2. Tennessee — 12 hospitals 3. Georgia — 7 hospitals source

Republican health policy is destroying rural health care

The border between Kentucky and Tennessee runs just over 340 miles in a nearly straight line. It doesn’t waver to follow natural divides, such as rivers or high mountains. It is an entirely artificial designation indicating only a difference on governance.

But oh, what a difference governance can make. On one side of that straight line, rural health care is doing well. On the other, it’s undergoing something close to a collapse.

The roots of that collapse run deep and speak to important aspects of what kind of country we want to be. When President Ronald Reagan signed the Emergency Medical Treatment and Active Labor Act (EMTALA), mandating that hospitals treat desperately ill people without regard for whether they could pay, it was a triumph of humanity over economics. Congress and the president acknowledged that health care has a moral component above other goods and services, and that the market could not be relied upon to fulfill that moral obligation.

The passage of the EMTALA had relatively mild effects on hospitals in wealthy communities, where almost everyone is insured. But in poor areas with large numbers of uninsured, it dropped an existential burden on already frail medical centers. 

Because poverty rates in farm communities are higher than in cities, the cost of Reagan’s unfunded mandate fell hardest on rural hospitals. In addition, the increasingly capital-intensive nature of high-tech medicine favored big hospitals benefiting from economies of scale. Over time, that double whammy increased the fragility of hospitals in America’s small towns until, according to The National Rural Health Association, more than 700 rural hospitals were at risk of going out of business.

The Affordable Care Act’s Medicaid expansion was intended not just to provide more humane treatment for the uninsured, but to ensure that the hospitals serving the working poor would remain viable. North of the Tennessee border, Kentucky’s former Democratic governor enthusiastically embraced and supported the expansion, providing insurance to hundreds of thousands of people, mostly in rural areas. To the south, in Tennessee, the Republicans in charge abandoned Reagan’s humanity in favor of small-government ideology. They refused billions in federal aid, leaving the welfare of their constituents to market forces that are, literally, amoral.

The results, only a few years later, are dramatic. Before the ACA, the uninsured rate on Kentucky’s side of the border was 16 percent; Tennessee’s was 15 percent. According to a Kaiser Family Foundation study, after the ACA Kentucky’s rate has dropped to 7 percent, while Tennessee’s has remained high, at 13 percent. (The national average is 10 percent.)

There is no explanation for the difference that the Kentucky-Tennessee border makes except the two states’ different approaches to the health of their citizens. If Tennessee had accepted the Medicaid expansion and its uninsured rate had fallen as far as Kentucky’s, its health care system would be serving 400,000 fewer uninsured patients. In rough terms, hospitals and clinics would have almost $750 million more to cover operating expenses.

Since the passage of the ACA, 10 Tennessee hospitals have gone out of business, versus only four in Kentucky. (Adjusted for population, Tennessee’s closure rate is about 50 percent more than Kentucky’s.) 

When a rural hospital closes, it impacts not just the area’s health, but its economy. Studies have shown that after a hospital closes, unemployment rises and wages fall. The sense of place the hospitals support weakens, with all the social pathologies that accompany the loss of a sense of community.

“Our politicians are blind to these people,” says Dr. Garrett Adams, who founded the Beersheba Clinic to provide health care in Tennessee’s rural mountains. “It’s like the population nobody cares about.”

In a rational world, our two states would look across the border and adopt the policies most beneficial to their citizens. In fact, nothing of the sort is happening. Kentucky’s new Republican governor is ignoring the lessons of Tennessee and busily hacking away at the state’s successful ACA adoption — which will cost at least 100,000 people their health insurance and cause rural hospitals to close. In Tennessee, Republican resistance to the ACA is so entrenched that adopting the successful policies of the state next door isn’t even under consideration. 

The great irony of this is that the counties most adversely affected by Republican policy are counties that typically vote heavily Republican. The hospitals that go out of business, the patients who go untreated, the small businesses that fold as communities collapse are part of the Republican base. One would imagine that would be of concern to Republican politicians on both sides of our long, straight border. It’s not. 

John Yarmuth (D) is U.S. representative for Kentucky's 3rd Congressional District. Mariah Phillips is a teacher and a Democratic candidate for Congress in Tennessee's 4th District.

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Hospitals In States That Expanded Medicaid Less Likely To Close

The expansion of Medicaid helps rural hospitals stay afloat in states like Colorado, which added 400,000 people to the health insurance program under the Affordable Care Act.

Hospitals in states that expanded Medicaid were about 6 times less likely to close than hospitals in non-expansion states, according to a study by researchers at the University of Colorado Anschutz Medical Campus.

The study was published Monday in the January edition of the journal Health Affairs.

Colorado was one of 32 states to expand Medicaid under the Affordable Care Act. That cut the state's uninsured rate in half. The biggest group that got coverage was childless adults.

Richard Lindrooth, a professor at the Colorado School of Public Health and lead author of the study, says hospitals saw more people showing up to hospitals with that insurance — so Medicaid payments increased. That helped the hospitals' bottom line.

"It's not as though Medicaid is an extremely profitable form of reimbursement, but it is something," says Lindrooth, a professor the University of Colorado's School of Public Health. "On the margins, it certainly helps the hospitals' cash flow."

Lindrooth says he and his colleagues hypothesized that hospitals in expansion states stood a better chance of remaining financially viable. So they examined national hospital data and local market conditions.

They compared four years before the Affordable Care Act went into effect (2008-2012) with years right after the launch of the ACA (2015-2016). Lindrooth says the results were noteworthy, especially for rural hospitals, which often struggle to stay open.

"Rural hospitals tend to be in more of a financially tenuous position, even prior to the Medicaid expansions," Lindrooth says. "We found that really about half of the closures that did occur in non-expansion states could have been averted through the expansion."

With more insured people in expansion states, hospitals made more money and provided less free care. "So overall their margins improved," he says. Rural hospitals in non-expansion states didn't have that advantage.

Rural health leaders said the study confirmed what they've seen on the ground.

Jason Cleckler, CEO of Delta Memorial Hospital in Delta, Colo., in the rural western part of the state, said the Medicaid expansion helped his hospital's finances. He compared the numbers in 2011 with 2016, after expansion. The hospital's Medicaid population grew from 10 percent to 20 percent, and the hospital was left with less uncompensated care. It saved the hospital more than $3 million.

"I think that really speaks to what the researchers found. So Medicaid doubled, our bad debt decreased significantly, and the uninsured rate decreased significantly," Cleckler says. "It's pretty remarkable, and I would venture to say that most hospitals, even ones with a lower percentage of Medicaid, have experienced a similar story."

Cleckler did describe Medicaid coverage as a "mixed bag" for rural providers. Reimbursement rates can be paltry, he says. A hospital that pays $100 for a lab test may only be reimbursed $20. Another problem, he said, is many doctors and providers either won't accept or limit the number of Medicaid patients due to low reimbursement rates.

An average of 30 percent to 50 percent of rural patients are covered by Medicaid, noted Michelle Mills, CEO of Colorado Rural Health Center, which offers rural health providers education and training. Mills says the population in rural areas is generally "older, sicker and poorer" than in urban communities.

She says the expansion plus a bump in Medicaid reimbursement rates "has helped rural Colorado hospitals from closing." The jobs generated by those hospitals are key to rural economies, with health care one of the top three rural employers in Colorado.

"The importance of Medicaid expansion in our state cannot be understated," says Cara Welch, director of communications with the Colorado Hospital Association.

Welch says other factors also provided a boost, including the state's strong economy and its hospital provider fee. That fee helps reimburse hospitals for uncompensated care from the indigent population and those paying with Medicaid.

Brock Slabach, senior vice president of the National Rural Health Association, says the study correlates with data the group has reviewed. "If state legislatures and Congress want to cure the rural hospital closure problem, expanding Medicaid and not block-granting this important program would be the answer," he says.

Members of the Republican majority in Congress have suggested changing Medicaid to a block grant. That means that instead of the federal and state governments sharing payment for every enrollee who qualifies, the federal government would provide each state a set amount of money, capping total Medicaid spending. It would let states decide how to spend the money. But health care and hospital advocates worry that the change would likely lead to cuts over time.

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Small Eastern North Carolina Town Losing its Hospital

Nearly 70 years after first opening its doors, Scotland Neck’s critical access hospital will close its emergency room, inpatient beds and other acute care services at the end of the month.

Our Community Hospital has been losing money for eight years, said Tom Majure, the hospital’s administrator, and he and the hospital’s board could no longer find a way to make it financially viable.

Like many small, rural hospitals, Our Community just couldn’t pull in enough revenue.

Seventy percent of patients were on Medicaid and Medicare, and another 20 percent were self-pay, Majure said. Just 6 to 8 percent were on private insurance, which reimburses at the highest rates. And, he said, many of the private insurance patients had large deductibles and coinsurance they couldn’t afford, effectively turning them into self-pay or charity care cases.

“We just can’t make the numbers work anymore.”

But the bigger problem was the 20-bed hospital’s shrinking patient volume.

“At the present rate if they were (all) private pay and we collected every penny, we still would be losing money,” Majure said.

On a typical day now, four to five people come to the emergency room. Seriously ill patients are stabilized and then transported to one of the four larger hospitals nearby. Our Community doesn’t provide surgery or obstetrics services.

“We would have about two or three admissions in an entire month and some months we didn’t have anybody,” Majure said. “Inpatient services were practically nonexistent.”

Last year, Majure said, the hospital lost about $1.2 million on total revenue of $4 million.


Over the years, Majure said, he and the hospital board sought ways to keep the hospital open, including exploring relationships with other health systems. But nobody, he said, could figure out how to keep the hospital open in this rural, northeastern North Carolina town of fewer than 2,000.
“We just can’t make the numbers work anymore,” Majure said.

Economic woes

Steve Lawler, president of the North Carolina Hospital Association, said Our Community’s struggles, like that of many small rural hospitals, reflect the local economy.

“That community has struggled economically,” he said. “They’ve had a difficult time recruiting an adequate base of physicians.”

Doctors are key to hospital vitality. Primary care physicians, along with specialists such as surgeons, obstetricians, oncologists and others draw patients and create revenue streams for hospitals.

Now patients in and around Scotland Neck will have to go elsewhere.

Vidant Edgecombe Hospital in Tarboro, about 20 miles south of Scotland Neck, will likely see more of those patients said Wick Baker, president of Vidant Edgecombe.

“Maybe some additional ED visits,” he said. “We’re kind of serving that area to some extent already.”
There will still be some non-hospital services provided in Scotland Neck, Majure said.

Hospital officials will continue to operate a 60-bed nursing home that’s part of the hospital, Majure said. The Scotland Neck office of Rural Health Group, a federally qualified community health center, will extend its hours into the evenings on weekdays and open up for half a day on Saturdays.

Majure hopes to convert some of the inpatient hospital rooms to nursing home rooms, allowing it to increase the number of private rooms the nursing home offers from five to 22. Majure said he’s also talked with local physicians about using hospital space to operate a part-time primary care clinic.


“The board was adamant about trying to keep what we could here,” Majure said. “[We] wanted to continue to provide something for the community.”

Post-war roots

Our Community’s current building opened 25 years ago. But its roots stretch back to the post-World War II years when Congress passed the 1946 Hill-Burton Act to fund hospital construction.

In the decades that followed, Hill-Burton helped fund the construction of thousands of hospitals and clinics across the country. The goal was to increase access to care for returning World War II veterans and their families.

Our Community tapped those funds and opened in 1948 or 1950, “depending on who you ask,” Majure said.

“Every little place got their own hospital, which was a good idea,” Majure said. “Here it made a difference for the people for a long time. And then things kind of changed.”

Fifteen or 20 years ago, Majure said, the hospital’s ER was seeing about 350 people each month — two to three times its current volume. But the area’s population is older now and northeastern North Carolina has struggled economically.

Halifax County, where Scotland Neck is, had an unemployment rate of 6.8 percent in October, well above North Carolina’s 4.1 percent rate.

The hospital’s board agreed in principle about six months ago to close the hospital. They approved it formally earlier this fall and announced it to staff and the community at the beginning of December.

Majure said about 15 people — nurses, technicians and physicians — will lose their jobs, though he anticipated most of them would be able to find work in the area.

When he arrived in Scotland Neck in the early 1990s, though, he did not anticipate one day closing the hospital.

“I opened the doors,” he said. “We built this building in ‘92 and moved from the old hospital and added long-term care in the mix of what we did. It’s personal for me.”

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Medicaid Is Great, but Rural Maine Needs Hospitals, Too

LEWISTON, Me. — This week Maine voted to become the 32nd state to expand Medicaid despite opposition by Gov. Paul LePage, who had vetoed five previous expansion bills passed by the state legislature and has now threatened to block the results of the ballot initiative. Unless Mr. LePage succeeds, about 80,000 more Mainers will be eligible for coverage, a victory in an unsettling year for health care in America.

With the Affordable Care Act under constant threat from the Trump administration and out-of-pocket costs rising faster than wages, health care topped the list of the most important issues facing Americans this year.

However, Maine and other rural states face a health care crisis that Medicaid expansion can’t fix on its own. It’s not about affordable coverage; it’s about access: For too many rural areas, doctors and hospitals are scarce.

In the postwar era, America made hospital construction and modernization a priority. On Aug. 13, 1946, Harry Truman signed the Hill-Burton Act, giving communities grants and loans for hospital construction. By 1975, almost one-third of American hospitals owed their creation to the law. Financing for Hill-Burton health care construction ended in 1997, but one rule from the original bill still applied: These hospitals had to give free or reduced care to people who couldn’t afford services. As rural areas aged and the population shrank because of manufacturing’s decline and the rise of a technology-driven economy centered on urban areas, hospitals struggled to stay in operation.

Under the Affordable Care Act, hospitals started shutting down at worrisome rates because of an increase in financial penalties for noncompliance with A.C.A. mandates, the cost of tighter reporting standards and smaller reimbursements for certain procedures. Since the A.C.A. became law in 2010, over 80 rural hospitals have closed nationwide. Maine alone has lost three hospitals in that time, about 10 percent of its rural total.

If closings continue at this rate, 25 percent of America’s rural hospitals will have disappeared in the decade after Obamacare’s passage. This does not take into account facility deterioration, doctor departures or department closures.

This is a big problem for Maine, which has the highest percentage of rural residents in the country, according to the most recent census data. Calais Regional Hospital in Down East Maine recently oversaw its last childbirth. The obstetrics department closed in late summer, forcing women in labor to drive 50 minutes to deliver their babies. Despite an opioid crisis that increases the chance of high-risk pregnancies, this same privately owned hospital shut down its pediatrics wing and intensive care unit in recent years, because of financial pressure from the management company halfway across the country in Tennessee.

This was hardly an isolated example in Maine. The town of Jackman closed its 24-hour emergency room in September, and Boothbay lost its only hospital in 2013. Rangeley, where my wife’s family lives, is an hour away from the nearest hospital and has no doctor in town.

Meanwhile, Maine Med in Portland, Maine’s largest city, is about to break ground for a $512 million addition just a few years after it finished a $40 million renovation. While rural Maine’s hospitals and departments are closing because of large losses, Maine Med had, for 2016, a $61 million surplus.

Medicaid expansion is a welcome source of new revenue to rural hospitals in Maine because more insured patients mean fewer uncompensated treatments. Still, it comes nowhere close to fixing the problem or, politically, putting any meaningful points on the Democratic scoreboard.

In 2016, Donald Trump won Maine’s rural congressional district by a 10-point margin and rural counties in America at large by a 26-point margin on a message of repealing and replacing Obamacare. As Maggie Elehwany of the National Rural Health Association said in an NPR interview this year, rural Americans voted for Mr. Trump in part because of health care. “They see their hospitals closing,” she noted. “And one hospital C.E.O. described it as a three-pronged stool. It’s the churches, the hospitals and the schools. If you lose one of those legs of that stool, the whole community collapses.”

Since President Trump hasn’t been able to deliver on any meaningful legislation to support rural voters, it is the Democrats’ time to deliver. One good step is a bill sponsored by the Democratic senators Tim Kaine of Virginia and Michael Bennet of Colorado called Medicare-X. It would give a public option to Americans in rural counties where limited competition has yielded higher-priced health insurance options.

It still doesn’t solve the heart of the rural problem. Democrats can’t just lower premiums and expand Medicaid. We must strengthen rural communities by making access to high-quality health care services a priority of any proposal. In any future legislation, we should demand grants for new hospitals, funds to modernize crumbling ones and financial incentives for top doctors to work in these areas. This will not only make rural communities healthier, but also more welcoming for growth and new business.

No person suffering from a heart attack should die because a hospital is too far. No pregnant mother should have to risk the health of her baby because she can’t make it to a delivery room in time. As Democrats, we believe that health care is a right. It would be a big mistake to expand health care insurance but offer no place to use it.

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Rural Hospitals Are Dying and Pregnant Women Are Paying the Price

Heavily reliant on Medicaid dollars, small hospitals shut down maternity wards just to stay afloat.

BOONE, N.C.—Three years ago, Lucia Parker gave birth to her first child surrounded by people she loved. Her mother, sister, and husband were by her side at Blue Ridge Regional Hospital, and the nurses attending her were family friends. Each of them took turns massaging her back. They lifted her out of a birthing tub and gave her an epidural when the labor pains grew too intense. By the time her son was born, there was not a dry eye in the room. “It felt like family,” Parker says.

The hospital, in Spruce Pine, North Carolina, was 25 minutes from Parker’s home. But this February, when her second baby is due, she won’t be able to deliver there. Instead, she plans to drive an hour-and-a-half southwest to Mission Hospital in Asheville, on mountain roads that could be slick with ice and snow, to give birth in a room with nurses and staffers who are strangers. “I have no idea how that’s actually going to work,” she says. “I am not gonna know anybody when I have this baby.” She doesn’t have much of a choice. Blue Ridge’s labor and delivery unit, which delivered 173 children last year, shut down on September 30. The next closest hospital with a maternity ward, McDowell Hospital in Marion, is roughly an hour southeast of Parker’s home, but she’s afraid to drive there in labor. To reach it, she would have descend 1,400 feet in elevation, navigating a road with curves so tight motorcycle riders call it “The Devil’s Whip.”

Parker is not alone. As Congress debates repealing and replacing the Affordable Care Act, rural hospitals are in a kind of purgatory, unsure about their Medicaid budgets and the private health insurance that sustains them. At least 81 rural hospitals have shut down across the country since 2010, according the North Carolina Rural Health Research and Policy Analysis Center at UNC. The pace of closures has been increasing since the Great Recession, but the current health care policy limbo—which leaves hospitals and insurers unable to predict their income—exacerbates the problem. “The uncertainty is really impinging providers, particularly hospitals, from making the kinds of decisions that might put them on a better footing,” says center director Mark Holmes.

Parker lives in an impoverished swath of rural Appalachia where the hospitals are particularly vulnerable. In her Congressional district, 20 percent of families with children live below the poverty line and more than 40 percent of residents—roughly 318,000 people—rely on some form of publicly-funded health care. Another hospital in the district, Angel Medical Center in Franklin, North Carolina, shut down its maternity ward in July, after officials said the unit was losing $2 million a year. And Parker’s congressman, Republican Mark Meadows, has not intervened to keep them open. The Freedom Caucus chairman has been one of the nation’s most vocal critics of Obamacare, favoring legislation that ends insurance subsidies and makes deep cuts to Medicaid.

Any cuts to Medicaid would hurt rural hospitals, says Diane Calmus, government affairs and policy manager for the nonprofit National Rural Health Association. Seventy-five percent of patients in the Mission Health system—the nonprofit that runs Blue Ridge, Angel, and four other western North Carolina hospitals—are either uninsured or on Medicare or Medicaid. These hospitals were especially hard hit when the Republican-led North Carolina General Assembly refused to expand Medicaid in 2013. Eighteen other states made the same decision, and the impact was clear: more than 70 percent of the rural hospitals that shut down in the past seven years were in 16 of those states. Four hospitals in rural North Carolina have closed since 2013, and Blue Ridge has been losing money every fiscal year since 2013. Last year it lost $3.1 million. Charity care—services that no one pays for—at rural hospitals has increased more than 50 percent since Obamacare passed. “We have a rural hospital closure crisis,” Calmus says.

Holmes and other experts say the lack of Medicaid expansion is not the only cause of the crisis. They point to low Medicaid reimbursement rates, patients who can’t afford their deductibles, consolidation of hospital ownership, declining rural populations, medical staffing shortages, and a longstanding trend of Southern hospitals struggling to make ends meet. “You really have a death by a thousand paper cuts situation here,” Holmes says. But if a hospital wants to stay open, Calmus says, it may close a unit that is well-known for losing money: the maternity ward.

A recent study by researchers at the University of Minnesota found that more than half of the nation’s rural counties no longer have hospital obstetric services, and 9 percent of them lost those services between 2004 and 2014. Katy Kozhimannil, an associate professor at the University of Minnesota School of Public Health who co-authored the study, says hospital officials make these decisions only after weighing the community’s needs against their ability to keep their doors open. More than half of all births at rural hospitals are funded by Medicaid, but the program reimburses hospitals at half the rate private insurance would. Low birth rates in rural areas compound the problem, because there are fixed costs for maintaining around-the-clock nurses, technicians, doctors and equipment. Mothers in Yancey County, where Parker lives, had 182 babies in 2015, compared to mothers in Buncombe County, which contains Asheville, who had 2,625 babies that year. “Obstetrics… is not a money maker for hospitals anywhere,” Kozhimannil says. “At some point, it just becomes untenable to have the staff available.”

Mission Health officials say the decision to close the labor and delivery unit at Blue Ridge was not a financial one. They blame low birth rates at the hospital and concerns about “clinical quality and safety standards,” says Cara Truitt, regional advocacy director for Mission Health. Truitt pointed out that Blue Ridge had just one full-time obstetrician on call to deliver babies, and officials worried about providing the “general surgery support” needed to perform C-sections. By contrast, McDowell Hospital in Marion has three obstetricians, and Mission is currently investing $45 million to rebuild that hospital, with five new delivery rooms and a C-section suite slated to open next year.

But many of Blue Ridge’s doctors and nurses don’t buy that argument. In addition to the obstetrician, four other people currently deliver babies at Blue Ridge, and two of them are family practice physicians trained to perform C-sections. The real challenge, some argue, is not quality but quantity: Blue Ridge was projected to deliver 200 babies this year, which was not enough to offset its expenses. “It appears to us that the motive to close labor and delivery was largely financial,” the hospital’s medical providers wrote in a joint public statement released this summer. “Hospitals across the country face financial challenges. Labor and delivery units usually lose money.”

Mission concedes that the closure of Angel Medical Center’s labor and delivery unit was due, in part, to uncertainty over the future of Obamacare and the lack of Medicaid expansion in North Carolina. If the state had expanded Medicaid, Mission would be $8 million “better off,” instead of $34 million behind its budget goals, Mission CEO Ron Paulus told the local newspaper in May. (Paulus, through a spokesperson, declined to be interviewed for this story).

In April, senior Mission officials discussed the hospitals’ predicament with Meadows, who told local reporters he was shocked by the announcement that Angel’s labor and delivery unit would close. “Obviously it came as a bit of a surprise to me, but the decision was not predicated on anything we’re working on in regards to the repeal and replace of Obamacare—it was an independent business decision that was made,” Meadows told the Smoky Mountain News.

Meadows also denied that Medicaid expansion would have helped Angel keep its maternity ward open. “When looking at expanding Medicaid, it was mostly going to be for able-bodied single adults—that’s a totally different argument,” he said. In fact, pregnant mothers were covered by Medicaid before Obamacare passed. But Kozhimannil says an expansion would have sent more Medicaid payments to other parts of the hospital, and helped sustain money-losing operations, such as maternity wards.

Hospitals like Blue Ridge also receive special Medicaid funding, known as disproportionate share hospital payments (DSH), which help cover the cost of serving impoverished patients. Under Obamacare, those payments were supposed to disappear. In theory, they would be replaced by more patients receiving Medicaid coverage. But after many states refused to expand Medicaid, Congress repeatedly delayed the DSH funding cuts. They were slated to take effect on October 1, slashing $2 billion in federal funding from hospitals like Blue Ridge in the next fiscal year.

In May, Meadows said he was trying to find a way to avoid that funding cut. “I’m working with colleagues in the Senate on how we can work with what they call the disproportionate payment for Mission and other hospitals,” he told the Smoky Mountain News. “We now have to look at how we can make sure there’s incentive for taking care of those with critical needs and also keep providers financially viable.” It’s unclear if Meadows’ negotiations were successful. His press secretary did not respond to repeated requests for comment.

In the last week of September, the doctors at Blue Ridge delivered a baby every day, sometimes more than one. “The system is not ready for our department to close,” Dr. Dorothy DeGuzman said. DeGuzman, a family practice physician trained in high-risk obstetrics and C-sections, has been delivering babies at Blue Ridge for six years. Now she’s afraid the hospital will not be able to help women who need an emergency C-section. “And then a baby will die, and possibly a mother.”


A 2011 study of more than 49,000 pregnant women in Canada found that traveling more than an hour to give birth led to higher rates of babies being admitted to neonatal intensive care units. Mothers also have more unplanned deliveries when hospitals close their maternity wards. “They end up delivering in their car on the way to the hospital, on the side of the road, [or] in the emergency room,” Calmus says.

Truitt, the Mission spokesperson, downplayed such health risks. In the “very, very rare cases” when a women needs to give birth on her way to another hospital, she says, Blue Ridge can deliver the baby in its emergency room, and have an ambulance transport the mother and newborn to Asheville or Marion.

But DeGuzman also worries her more impoverished patients will stop going to their prenatal appointments, which could affect the health of their babies. Blue Ridge will continue to offer prenatal care, but many women prefer to see the same doctors for their pregnancies and delivery. Calmus says lower-income women might intend to drive to Asheville for such appointments, and then stop showing up because they have to take a day off work, or can’t afford the gas to drive three hours round trip. And they won’t have DeGuzman there to remind them. After she learned Blue Ridge’s maternity ward would shut down, DeGuzman accepted a job in California. She and the obstetrician who works at Blue Ridge are both leaving because they don’t want to stop delivering babies. This means the women of Yancey and Mitchell counties are losing two of the three doctors in the area who perform C-sections. “In rural America, many physicians are connected to the hospital, and when the hospital cuts service lines closes, they do lose that workforce,” Calmus says. “And the workforce doesn’t come back.”

The people who live near Spruce Pine understand what a loss this will be. This summer, families and doctors protested the closure of Blue Ridge’s maternity ward, and many were frustrated by Mission’s response. “They elected to close labor and delivery at Blue Ridge, sending us back to a level of care we have not experienced in this community since the 1960's or 70's,” Dr. Elizabeth Peverall, who cares for newborns at Blue Ridge, wrote in a letter to the editor of the local paper.

Some residents wonder how they will attract more young people and jobs to the area if mothers have no place to deliver their babies. Katie Willett, another patient of DeGuzman’s, said she would like to see a birth center open in the area. However, Kozhimannil, the University of Minnesota professor, says birth centers, which are primarily staffed by midwives, face many of the same financial challenges as hospitals. And it would be tough for one to open without a nearby obstetrics unit available to handle C-sections.

Meanwhile, Willett’s second child is due in February. She’s considering delivering at a birth center in Asheville, about an hour away from her home near Blue Ridge. But she’s not happy about it. “I’ve told Dorothy [DeGuzman], I can’t imagine this process—pregnancy and labor and delivery—not here and not with her by my side,” Willett says. If she goes into labor when it’s snowing in the middle of the night, Willett and her husband will pack extra blankets and water in their car and start driving toward Asheville or Marion—whichever path is safest. “Worst case scenario, I think we’d have to consider the road.”
 
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After hospital closes, hope for healthcare coming back to Crockett

CROCKETT, TX (KTRE) -The past 17 days have been difficult for Crockett area residents looking for healthcare.

The Crockett Clinic opened its doors for the first time this morning for the first time since Little River Healthcare close Timberlands Hospital at the end of June due to financial issues.

"We have been a clinic here for 50 years," Dr. Christopher Haeckler said. "We were only managed by Little River for three months. When they announced they were closing, we had to shut down and make sure we got all of our accounts back opened in our name, so we could operate."

The clinic does primary care and can see people of all ages. They are currently working on getting permits back to do X-rays as well. The shock still has not worn off.

"It's like running into a brick wall," Haeckler said. "One minute everything is okay, and then the next, you are being called over to the hospital and being told that you are getting shut down. We are very fortunate that we could go back to work, but the community is pulling together the best they can."

The clinic being opened was good news to George Gale, who brought his wife for an early afternoon appointment. The couple lives in a subdivision on Houston County Lake and just driving to Crockett takes 20 minutes. Gale is concerned that it will only get worse the longer the city goes without a hospital.

"We have to go to Palestine, Lufkin, or Nacogdoches," Gale said. "Elderly people are just not in shape to drive over there, and some can't drive it. They have to have a hospital here."

Inside the hospital, it is quiet. There is very little activity except for a dentist office and a foot doctor that operate as private practices. Crockett Dental Care has been inside the hospital building for 17 years. The closure came as a shock for them. Everyday, the staff still goes outside at noon to pray for a resolution. It is a practice that started the day after the closure was announced.

"We know we are going to have healthcare," said Office Manager Laura Holcomb. "We don't know what shape or form that is going to be, but we know we need it and that God will provide."

Inside the office, just like at business across the county, a coin jar is set up to collect change that will be donated to the Houston County Hospital Board with expenses they now have.

"We had a 25-year lease with Little River," Holcomb said. "We did not think about having to do fund-raising efforts. Now the board has expenses they did not think about like yard work and attorney fees."

As the days count on, someone has left a message on the sign that once said Timberlands. It is a message to help people remember the struggle facing the community. It is a sign that simply reads, "Keep Hope Alive." Holcomb smiled when she thought about the sign.

People can donate to the fundraising effort by dropping off funds at: The Grapeland Messenger, Twisted Sister, Lucky Cleaner, Knox Furniture, The Houston County Courier, The Moosehead Cafe, Davy Crockett Drug, Crockett Dental Care, The Houston County CO-OP, Mike's Corner Store, Lovelady State Bank, and Prosperity Bank.

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Republicans' Proposed Medicaid Cuts Would Hit Rural Patients Hard

For the hundreds of rural U.S. hospitals struggling to stay in business, health policy decisions made in Washington, D.C., this summer could make survival a lot tougher.

Since 2010, at least 79 rural hospitals have closed across the country, and nearly 700 more are at risk of closing. These hospitals serve a largely older, poorer and sicker population than most hospitals, making them particularly vulnerable to changes made to Medicaid funding.

"A lot of hospitals like [ours] could get hurt," says Kerry Noble, CEO of Pemiscot Memorial Health Systems, which runs the public hospital in Pemiscot County, one of the poorest in Missouri.

The GOP's American Health Care Act would cut Medicaid — the public insurance program for many low-income families, children and elderly Americans, as well as people with disabilities — by as much as $834 billion. The Congressional Budget Office has said that would result in 23 million more people being uninsured in the next 10 years. Even more could lose coverage under the budget proposed by President Trump, which suggests an additional $610 billion in cuts to the program.

That is a problem for small rural hospitals like Pemiscot Memorial, which depend on Medicaid. The hospital serves an agricultural county that ranks worst in Missouri for most health indicators, including premature deaths, quality of life and even adult smoking rates. Closing the county's hospital could make those much worse.

And a rural hospital closure goes beyond people losing health care. Jobs, property values and even schools can suffer. Pemiscot County already has the state's highest unemployment rate. Losing the hospital would mean losing the county's largest employer.

"It would be devastating economically," Noble says. "Our annual payrolls are around $20 million a year."

All of that weighs on Noble's mind when he ponders the hospital's future. Pemiscot's story is a lesson in how decisions made by state and federal lawmakers have put these small hospitals on the edge of collapse.

Back in 2005, things were very different. The hospital was doing well, and Noble commissioned a $16 million plan to completely overhaul the facility, which was built in 1951.

"We were going to pay for the first phase of that in cash. We didn't even need to borrow any money for it," Noble says while thumbing through the old blueprints in his office at the hospital.

But those renovations never happened. In 2005, the Missouri legislature passed sweeping cuts to Medicaid. More than 100,000 Missourians lost their health coverage, and this had an immediate impact on Pemiscot Memorial's bottom line. About 40 percent of their patients were enrolled in Medicaid at the time, and nearly half of them lost their insurance in the cuts.

Those now-uninsured patients still needed care, though, and as a public hospital, Pemiscot Memorial had to take them in.

"So we're still providing care, but we're no longer being compensated," Noble says.

And as the cost of treating the uninsured went up, the hospital's already slim margins shrunk. The hospital went into survival mode.

The Affordable Care Act was supposed to help with the problem of uncompensated care. It offered rural hospitals a potential lifeline by giving states the option to expand Medicaid to a larger segment of their populations. In Missouri, that would have covered about 300,000 people.

"It was the fundamental building block [of the ACA] that was supposed to cover low-income Americans," says Sidney Watson, a St. Louis University health law professor.

In Missouri, Kerry Noble and Pemiscot Memorial became the poster children for Medicaid expansion. In 2013, Noble went to the state capital to make the case for expansion on behalf of the hospital.

"Our facility will no longer be in existence if this expansion does not occur," Noble told a crowd at a press conference.

"Medicaid cuts are always hard to rural hospitals," Watson says. "People have less employer-sponsored coverage in rural areas and people are relying more on Medicaid and on Medicare."
But the Missouri legislature voted against expansion.

For now, the doors of Pemiscot Memorial are still open. The hospital has cut some costly programs — like obstetrics — outsourced its ambulance service and has skipped upgrades.

"People might look at us and say, 'See, you didn't need Medicaid expansion. You're still there,' " Noble says. "But how long are we going to be here if we don't get some relief?"

Relief for rural hospitals is not what is being debated in Washington right now. Under the GOP House plan, even states like Missouri that did not expand Medicaid could see tens of thousands of residents losing their Medicaid coverage.

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Hospitals tackle uncompensated care costs

ATLANTA – Georgia’s hospitals continue to be a major economic force in spite of growing uncompensated care costs statewide, according to a new report.

An annual report from the Georgia Hospital Association, an advocacy group, concluded that hospitals in the state contributed nearly $47.8 billion to the economy statewide in 2015.

Across the state, facilities collectively had more than 141,000 full-time employees on their payroll and indirectly created more than 344,000 jobs, with hospital purchases supporting medical supply businesses and others.

South Georgia Medical Center in Valdosta had 2,003 full-time employees in 2015, according to hospital spokeswoman Laura Love. More than 4,800 jobs were indirectly created by SGMC, the report says.

The hospital's Valdosta campus provided $23,206,976 in uncompensated care that year, $6.6 million less than in 2012. SGMC's two satellite campuses, in Berrien and Lanier counties, provided uncompensated care valued at $1,166,450 and $1,328,496, respectively, in 2015, according to the report.

In communities such as Moultrie, the hospital represents one of the largest employers. Colquitt Regional Medical Center had 1,114 employees in 2015, with another 2,709 jobs indirectly created.
Yet, Colquitt Regional has also seen its uncompensated care grow to $11.5 million in 2015, which is a 37 percent jump since 2011.

Hospitals across the state provided more than $1.7 billion in services for which they were not paid in 2015.

“Throughout Georgia, hospitals are the only source of medical care for most uninsured residents,” Earl Rogers, the association’s president and CEO, said in a statement.

“Add to that a growing number of residents who actually have insurance but cannot pay their high insurance deductibles, and hospitals end up absorbing even more losses. These dynamics are not sustainable long term,” Rogers added.

A high rate of uninsured Georgians and a Medicaid reimbursement rate that does not cover a hospital’s actual costs have compounded the losses, according to the association.

About 42 percent of all Georgia hospitals reported they operated in the red in 2015, according to the report.

Rural hospitals were hit particularly hard, with 68 percent losing money. Six hospitals have shuttered since 2013, hampering local efforts to attract new industry and leaving residents traveling farther for medical care.

Colquitt Regional is among the minority of rural hospitals that reported a positive margin.

CEO Jim Matney said in an interview this week the hospital spends about $6 million a year on technology to keep the facility’s service offerings current and attractive to the community.

“What causes rural hospitals to close down is not the fact that they’re just rural,” Matney said. “But because they can’t keep up with the services that are being offered.

“For example, if you had to have your gall bladder taken out, would you want it done robotically and have one little stitch or would you rather them go ahead and open you all the way up? That’s a real scenario,” he added.

While South Georgia Medical Center's network as a whole finished in the black in 2015 with a 7.8 percent margin, the Lanier and Berrien campuses lost money, Love said. The Berrien campus lost $403,000, the Lanier campus lost 4165,000, and the Lakeland Villa — a nursing facility alongside the Lanier hospital facility — lost $310,000.

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Kansas hospitals are hurting, at risk

Those standing firm against expanding Medicaid in Kansas have their reasons, however politically contrived. But, as predicted, their inaction is harming the health care industry, which represents 9 percent of the state’s economy.

Those standing firm against expanding Medicaid in Kansas have their reasons, however politically contrived. But, as predicted, their inaction is harming the health care industry, which represents 9 percent of the state’s economy.

Gov. Sam Brownback’s 4 percent cut to Medicaid reimbursement rates as of July 1 only increases the financial stress, by further shorting health care providers already suffering from federal payment reductions. As the cut to mostly urban physicians, dentists, hospitals, nursing homes and others frees up $38 million to help balance the state budget, it fuels worries that providers will accept fewer Medicaid patients and that access to care will be jeopardized for the very poor and those with disabilities.

How many jobs will be trimmed and providers hobbled before the governor and his GOP legislative allies are persuaded that Kansas must join the 32 states that have expanded Medicaid under the Affordable Care Act? Might KanCare, Brownback’s signature 2013 privatization of Medicaid, be stronger if the state’s health care system hadn’t forfeited the $1.2 billion in federal funding since 2014 that would have accompanied Medicaid expansion?

Now, 1 in 3 rural Kansas hospitals is at risk of going the way of Independence’s Mercy Hospital, which closed last fall amid mounting financial losses. Though it’s unclear what would have been the hospital’s salvation, Medicaid expansion would have brought it an additional $1.7 million a year.

Last week Wichita-based Via Christi Health announced it would eliminate 150 positions while adding 80 bedside nursing jobs.

When asked about the effect of Medicaid cuts and lack of expansion, interim CEO Todd Conklin told The Eagle in a statement: “Our state’s decision not to expand KanCare continues to have a significant negative impact on Kansas health systems, especially those that like Via Christi serve this important part of our communities.”

Via Christi estimates the state’s refusal to expand Medicaid is costing it $14 million per year and the state’s Medicaid rate cut will mean a loss of $4.3 million more a year.

So the situation is even worse than the “the worst of both worlds” that Via Christi’s then-CEO Jeff Korsmo predicted three years ago in The Eagle: “providing more uncompensated care for Kansans still not eligible for Medicaid while receiving less money from the federal government to cover these costs.”

State lawmakers have heard all this again and again, including in packed and emotional House hearings last year. The Kansas Hospital Association has proposed an expansion plan it calls “beyond budget neutral,” in that the state’s cost of $57.5 million in 2017 would be offset by additional revenues and savings of about $159.4 million.

If state leaders are uninterested in enabling 150,000 Kansans to become insured because it would mean “expanding Obamacare,” to use the governor’s words from last week, how long can they avert their eyes from the consequences for the health care industry and overall state economy?

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Read more here: http://www.kansas.com/opinion/editorials/article84498007.html#storylink=cpy

Read more here: http://www.kansas.com/opinion/editorials/article84498007.html#storylink=cpy

Another rural Georgia hospital shuts its doors

Hutcheson Medical Center in northwest Georgia closed its doors to patients Friday morning — the fifth rural hospital to close in the Peach State since 2013.

The hospital’s closure came after months under bankruptcy protection. And a last-minute bid by California-based Prime Healthcare to purchase the Fort Oglethorpe hospital failed to win approval from Hutcheson’s creditors.

 

“This decision is a blow to both the economy and the accessibility of health care in the … area,” Prime Healthcare attorney Troy Schell said in a statement.

Dozens of rural Georgia hospitals are in serious financial straits. They face aging populations, growing numbers of uninsured patients and new government regulations. Earlier this year, a committee of hospital executives, elected officials and health care experts laid out a plan to try and stabilize rural Georgia’s fragile health care system by improving coordination among existing hospitals and improving technology in ambulances, among other efforts.

Many hospitals, however, continue to struggle to remain open.

Hutcheson Medical Center CEO Farrell Hayes said Friday that no patients were remaining when the closure occurred at 7 a.m.

Hayes said there’s still a chance that a purchase deal can occur before the hospital must surrender its license within 10 days of closure. But he did not sound hopeful that an agreement could be reached.
“After today, we’ll have 150 employees,’’ he said, and most of those work at Hutcheson’s nursing home, which is still open. A year and a half ago, Hutcheson said it employed 900 people.

“Any hospital closure is an economic development disaster,’’ said Jimmy Lewis, CEO of HomeTown Health, an association of rural hospitals in Georgia.

Companies seeking to move to an area always ask about the availability of local health care facilities, he noted.

Prime Healthcare, which recently forged a deal to save the struggling Southern Regional Medical Center in metro Atlanta, issued a statement Thursday evening that expressed disappointment in the Hutcheson outcome.

“Prime Healthcare worked tirelessly with the key stakeholders to save this hospital and keep over 400 dedicated people employed during the holiday season,’’ Schell said.

Prime Healthcare Services and the nonprofit Prime Healthcare Foundation own and operate 38 acute-care hospitals in 11 states. They are known for acquiring financially distressed hospitals and turning them around.

Regions Bank and Erlanger Health System are Hutcheson’s primary creditors, according to the Walker County Messenger/Catoosa County News.

“Hutcheson Medical Center is closing because Regions Bank believes it stands to make more money in a liquidation fire sale than working with Prime and others to keep it open,’’ Schell said. “Their actions are shameful and will affect thousands of Georgia residents.”

A spokesman for Regions Bank declined to comment Friday on the hospital closure.

The foundation’s purchase of Southern Regional Medical Center, in Riverdale a few miles south of Atlanta, is set for review by the Georgia attorney general. Southern Regional would be Prime’s first hospital in Georgia.

The impact of Hutcheson’s closing on patients would be eased somewhat due to Fort Oglethorpe’s proximity to Chattanooga. The Tennessee city is nine miles away.

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Nebraska rural hospitals bucking the trend

A national trend of rural hospitals closing has some fearful a crisis is brewing, while local hospital officials credit conservative budgeting for Nebraska's ability to stay ahead of the curve. 

A total of 50 hospitals in the rural U.S. have closed since 2010 and the pace has been accelerating, according to an Associated Press story released Friday which indicates some health care analysts fear it could be the beginning of a crisis. The National Rural Health Association says there have been more closures in the past two years than in the previous 10 years combined.

An additional 283 rural hospitals in 39 states are vulnerable to shutting down, and 35 percent of rural hospitals are operating at a loss, according to iVantage Health Analytics, a firm based in Portland, Maine, that works with hospitals.

Most of the rural hospital closures so far have occurred in the South and Midwest. Of those at risk, nearly 70 percent are in the 21 states that have declined to expand Medicaid under the federal Affordable Care Act, although some experts are hesitant to draw a cause-and-effect correlation.

Nebraska is bucking the trend on both fronts, declining to expand Medicaid and found to have only one rural hospital out of 72 vulnerable to shutting down by the iVantage analysis. By comparison, 102 rural hospitals were studied in Kansas and 17 of them were considered to be vulnerable to shutting down. 16.7 percent of Kansas hospitals studied were vulnerable compared to 1.4 percent in Nebraska.

McCook's Community Hospital CEO Jim Ulrich attributes conservative budget practices as the primary reason Nebraska hospitals have remained financially sound, when other states have waned. During a visit with the Gazette Friday, he said it was a trickle down effect stemming from expectations of a balanced budget placed on state government in Nebraska.

Ulrich said he was familiar with iVantage analytics and wasn't surprised Nebraska faired so well in the report, he also added an assurance that Community Hospital definitely wasn't the lone Nebraska hospital found to be vulnerable.

Although the fiscal landscape for Nebraska hospitals faired well in the analysis, when compared to other states struggling with a significant number of vulnerable locations, Ulrich warned that further cuts to Medicare would make that number bigger.

"Obstacles to access-to-care, at a regulatory level, will drive Nebraska's number up," said Ulrich, adding the decision not to expand Medicaid on a state level has also hurt Nebraska hospitals.
Ulrich said it was important to think about the impact on a community that occurs when a rural hospital must be closed.

He said often times, such as in McCook, the local hospital is one of the larger employers and serves as a significant driver of the local economy.

"This is about the health of not just rural hospitals, but rural communities as well," said Ulrich. Nebraska may only have one location found to be financially vulnerable by the analysis, however, Ulrich said that doesn't mean the state and local economies haven't been affected by cuts to the healthcare system.

Nebraska and Kansas have each closed one rural hospital since 2010. Tilden Community Hospital in Tilden, Nebraska, closed in 2014 and Central Kansas Medical Center in Great Bend, Kansas, closed in 2011.

The closures are part of what the Associated Press article refers to as a growing number of rural U.S. hospitals closing their doors, citing a complex combination of changing demographics, medical practices, management decisions and federal policies that have put more financial pressure on facilities that sometimes average only a few in-patients a day. In some cases, the shuttered hospitals have been replaced by clinics offering urgent care and other outpatient services, other closures have simply left a void.

Similar to Ulrich's comments, the Associated Press article quoted several health care officials raising concerns related to the far-reaching impact of the closures.

"When a hospital closes, the physicians leave. A lot of the health care infrastructure leaves. Sometimes the local businesses will leave ... the schools suffer," said George Pink, deputy director of the Rural Health Research and Policy Analysis Center at the University of North Carolina. "There's a whole multiplier effect that really can devastate some towns."

Big city hospitals have been closing at about the same rate as rural ones during the past five years, but an abundance of alternatives in most major metropolitan areas typically reduces the effect on patients. When a rural hospital closes, people might have to travel dozens of miles to reach the nearest hospital, an inconvenience that can sometimes be a matter of life or death.

Population decline, depressed local economies and changes in inpatient admission guidelines were among factors that have played a role in numerous hospital closures. Rural areas tend to "have older, poorer, sicker populations," said Michael Topchik, senior vice president of iVantage.

That means they often have a higher percentage of patients covered by Medicare and Medicaid, government health care programs that pay a lower reimbursement rate than private-sector insurers. Hospitals that rely heavily on those programs have been particularly hard hit by federal budget cuts and provisions in the 2010 federal health care law that reduced charity care reimbursements and linked a portion of hospitals' Medicare payments to quality standards and readmission rates.

The effects of the federal health care law were the prime factor leading East Texas Medical Center to close three of its 12 rural hospitals last year, said Perry Henderson, the hospital system's senior vice president for affiliate operations.

"The small rural hospitals are the most brittle of the bunch," Henderson said. "When you began cutting on those reimbursements, it hits their margins and pretty quickly drives those hospitals to some pretty significant losses."

The framers of the federal health care law assumed the cuts would be offset as more patients became covered by private insurance and Medicaid. But Texas, which has the nation's highest uninsured rate, is among 21 states mainly in the South and Great Plains that have declined to expand Medicaid eligibility.

The trend also has reached into California, where the booming economy along the coast contrasts with Central Valley agricultural communities that have been devastated economically by years of drought. Many residents remain uninsured or have Medicaid.

After 45 years of providing health care in rural Missouri, Sac-Osage Hospital is being sold piece by piece.

At Sac-Osage, poor management was among the reasons the rural Missouri hospital fell into financial ruin. Some of its doctors, for example, were never approved to be paid by particular insurance companies. And it lost what some staff estimate was $1.5 million to $2 million because the clinic failed to send out thousands of bills to insurers and patients since 2012.

For state Rep. Warren Love, a local cattle rancher who tried to help save Osceola's hospital, its passing now seems sort of inevitable.

"Everything has evolved to the big gets bigger and the littlest disappears," Love said, "and that's really what's happened with these hospitals."

Figures on rural hospital closures were compiled by the AP from data supplied by the Health Resources and Services Administration of the U.S. Department of Health and Human Services and by the Rural Health Research Program at the Cecil G. Sheps Center for Health Services Research at the University of North Carolina. Figures on vulnerable rural hospitals provided by iVantage Health Analytics are based on publicly available data about the financial stability, patient marketplace and cost and quality indicators for hospitals. The hospitals in the bottom tier, which are categorized as vulnerable, have similar characteristics as hospitals that have closed.

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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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Hospitals face closures as 'a new day in healthcare' dawns

As hospitals increasingly lose patients to medical care delivered in clinics and home settings, hospital operators are escalating their efforts to shrink capacity.

Hospitals are operating with fewer beds or closing outright, in some cases to make way for new ambulatory-care centers. In Lakewood, Ohio, where chronic conditions such as heart disease and diabetes are just as prevalent as in the rest of the country, the city is about to close its only hospital, whose 200 beds are typically half empty.

With three other hospitals within seven miles, the low occupancy rate makes city-owned Lakewood Hospital the high-cost provider in the area. “That's not sustainable or competitive,” said Lakewood Mayor Mike Summers, a hospital trustee.

Last month, the city announced it will replace the hospital with a $34 million ambulatory health center and emergency department. The proposal is a lower-cost, more accessible alternative. The new center will bring another 16 primary-care doctors to a community grappling with diabetes, obesity, heart disease and mental illness. “None of those would you lay in a bed to fix,” Summers said.

Behind closures like Lakewood's are the boom in high deductibles, better technology, more case management and shrinking reimbursement. While hospital admissions and lengths of stay have been falling for years, decline in U.S. hospital capacity has not kept pace. And overall hospital employment has been rising.

But that could change over the next few years. New public policy and marketplace incentives are encouraging health systems to promote prevention and keep patients with chronic diseases out of the hospital. The shift to outpatient care, underway for decades, is accelerating.

New technology and better drugs also are allowing more patients to receive treatment outside of hospitals. Meanwhile, discretionary surgeries and other procedures are still being postponed since household finances remain stressed, partly because of poor wage growth in the wake of the Great Recession, and partly because more workers are being shifted to high-deductible health insurance plans, which increase household medical bills.

Admissions to the nation's hospitals have slumped in the wake of the Great Recession and Affordable Care Act. The federal government's two-midnight rule no longer recognizes admissions for patients with very short hospital visits. The rule is fueling the drop in U.S. hospital occupancy rates, which fell to 60% in 2013 from 64% five years earlier and 77% in 1980.

Numerous markets across the country now have more hospital beds than they need. Given the intense pressure on hospitals to reduce costs, many healthcare organizations are driven to participate in narrow-network health plans as a way of outflanking the growing competition. Overcapacity is also feeding the ongoing merger-and-acquisition wave, which shows no signs of abating. Prime Healthcare Services' looming takeover of the six hospitals in the failing Daughters of Charity Health System in California will inevitably lead to reduced bed counts in those communities as Prime applies its own cost controls to the acquired facilities.

Expect stepped-up hospital closures and bed-count reductions over the next few years as better coordinated care drives more patients to outpatient settings and consumers remain under financial constraints.

Others are moving in that direction. Pittsburgh giant UPMC eliminated 410 beds, or roughly 8.5% of its capacity, last year. And Baxter Regional Medical Center in Mountain Home, Ark., shut units with little demand in 2014. The Medicare Payment Advisory Commission reports 27 hospitals closed last year.

Favorable demographics won't reverse the trend, consultants and health system executives say. Weak admissions are projected to last for years despite the millions of newly insured Americans, the aging of the baby boom generation and the steady upward creep of the overall population. “This flat or declining volume for inpatient is not a blip on the radar screen,” said Karin Henderson, executive director of strategic management for six-hospital Cone Health in Greensboro, N.C.

Small, independent hospitals and academic medical centers may be the most vulnerable to financial stress as occupancy rates decline. Small hospitals lack the capital to invest in primary- and ambulatory-care facilities to attract patients seeking prevention and wellness services or whose insurers are pushing them to seek care in outpatient settings.

 

 Keandra Griffin of Belhaven, N.C., attends a rally at the end of Mayor Andy O’Neal’s 273-mile walk to D.C. to call attention to rural hospital closings.

 

Small hospitals also lack consolidation options, leaving them with expensive, empty space that narrows margins and erodes viability. About half the hospitals that closed last year operated an average of roughly 60 beds, according to MedPAC data. “It's not enough to be just breaking even or getting a very small return to be a sustainable force in a marketplace,” said Margaret Guerin-Calvert, president of the Center for Healthcare Economics and Policy at FTI Consulting.

For academic medical centers, the high cost of their education, research and specialty services makes them less competitive as occupancy rates fall, consultants say. Many major AMCs are acquiring community hospitals to handle less-complex patients in lower-cost settings and reserving beds in the flagship academic hospital for only the sickest and most complicated patients.

Hospital executives say patients with high-deductible insurance policies, which now represent roughly 20% of all employer-provided health plans, are encouraged to seek care in lower-cost settings to hold down medical bills. That choice is adding to an already-growing demand for ambulatory care. “Patients are shopping,” said Henderson of Cone Health. “It is a new day in healthcare.”

That system has pegged its excess capacity at 200 beds. Cone Health is closing its Women's Hospital, and shifting the average daily census of about 100 women and infants to its flagship Moses H. Cone Memorial Hospital. It also plans to move more surgeries to the system's outpatient centers. “We will definitely go down some beds,” Henderson said. “And that's the point.”

UPMC also is replacing beds formerly used in its medical-surgical, psychiatric and skilled-nursing units with outpatient services. “Hospitals don't want to staff more beds than they have to,” said Moody's Investors Service senior analyst Daniel Steingart. “Hospitals, by and large, are constantly looking at their census and will close units as is possible.”

Hospitals with fewer staffed beds are looking for new ways to generate revenue from their excess physical space, including signing leases with hospice providers or even hotel operators, said Mark Grube, a managing director with Kaufman Hall. But there are limits to how far a hospital can take that strategy.

Many hospitals across the country are reaching a crossroads. The median age of U.S. hospital buildings is rising, and new construction has dropped sharply, with capital going toward ambulatory-care facilities, physician hiring, information technology and telehealth. Mobile-health apps will become more prevalent over the next few years as hospitals, patients and insurers look for new ways to improve care and reduce costs.

“Why would it happen in all other parts of our personal life and our economy and not happen in healthcare?” asked Kenneth Kaufman, managing director and chair of Kaufman Hall.

 

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