Rural hospitals – and patients - are at risk

Bill Knight column for 11-4, 5 or 6, 2019

More than 40 percent of the country’s rural hospitals operate in the red – some 400 in 43 states, according to the health-care consulting firm Navigant, and one-fifth of them are in financial peril.

In the Midwest, 23.1 percent of Indiana’s rural hospitals are in high financial risk, and in Missouri it’s 23 percent, 17.9 percent in Iowa and 17.3 percent in Illinois – where almost one-third of “essential” hospitals are in trouble, Navigant reports.

Since 2010, 113 rural hospitals have closed, says UNC’s Sheps Center for Health Services Research, which defines closures as facilities that stop providing general, short-term, acute inpatient care, based on the U.S. Department of Health and Human Services.

Rural residents tend to be older, sicker and poorer than the general population, often uninsured or using Medicare or Medicaid, leading to more uncompensated and under-compensated care. However, some health-care professionals cite declining inpatient care (rural hospitals average 50 beds but just 7 patients a day) and tight budgets making technical innovations difficult.

 “Being a CEO of a rural hospital today feels a bit like being Atlas in Greek mythology – the harder we strive to keep the doors open, the more regulatory and reimbursement weight is added,” commented Leslie Marsh, CEO of Lexington Regional Health Center in Lexington, Neb. “The current financial and regulatory environment makes it very difficult for small hospitals to remain profitable.”

In Canton, Ill. (pop.14,000), Graham Hospital is fortunate because its revenues don’t go to shareholders demanding quarterly returns on investments because it’s a non-profit, community-oriented enterprise. In Fiscal Year 2018, Graham had net income of some $13 million on revenues of $253 million, reports the American Hospital Directory.

“We’re not only independent; we’re owned by the community,” said Graham Hospital president Bob Senneff.

Indeed, Graham (with satellite clinics in four smaller communities) is run by a 15-person board of volunteers from its area. Besides an 81-bed hospital, Graham offers cardiac and pulmonary rehabilitation, imaging, obstetrics, and wound and hyperbaric medicine.

“The only service we’ve dropped in the last 15 years has been home-health and hospice care,” Senneff said. “There was just too much competition.”

Elsewhere, some hospitals try to diversify, specialize or stress outpatient services, but that’s no guaranteed answer.

Pat Schou, director of the Illinois Critical Access Hospital Network, said, “Health care has become very complicated. There are more regulations to follow. We face difficulty recruiting.”

Graham’s nearness to Peoria helps, Senneff said.

“We have good relations with OSF and UnityPoint, and the U of I School of Medicine,” he said. “That helps keep things local. People are training locally, maybe grew up in the area and are part of the community. For most, it’s not just a job, it’s a career here.”

The Center for Rural Strategies reports that almost half of the 113 closings in the last 20 years have happened since 2013 – more than double the rate of the previous five years, and many were a result of some state governments not expanding Medicaid as part of the Affordable Care Act (ACA). Hospitals are six time more likely to close if they’re in states were Medicaid wasn’t expanded, according to the Colorado School of Public Health.

The ACA successfully decreased the number of uninsured Americans, but the federal government predicted that that would mean much less uncompensated care than what happened, so it cut payments that gave rural hospitals a financial safety net.

Some may think, “So?” But 20 percent of the United States is rural, according to the Census Bureau, so it’s not an insignificant problem. However, it’s difficult.

“Challenges specific to the dilemma of rural hospital closure will take a national, state and local effort focused on the plight of rural communities struggling to maintain availability of essential health-care services,” concluded a team of researchers from Texas A&M University.

One effort was 2017’s bipartisan Senate measure, the Rural Emergency Acute Care Hospital Act co-sponsored by Republican Chuck Grassley and Democrat Amy Klobuchar, which stalled in committee.

Another idea is universal health care.

“There is one policy solution that would alleviate these problems: Medicare for All,” said Andy Spears of Citizen Action in Tennessee, where 18.9 percent of rural hospitals are at high financial risk.

“With Medicare for All, there would be standardized reimbursement for coverage,” Spears said. “And rural hospitals would be covered for the services they provide to people who currently have no health coverage.”

Alan Morgan, CEO of the National Rural Health Association, summarized the situation:

“Everyone realizes we’re at a crisis point,” he said. “It’s not really a question of how we keep rural hospitals open. It’s a question of ‘how do we keep rural Americans alive?’ ”