Rural hospitals closing at an alarming rate

Rural hospitals in trouble is not a new topic, but the significant increase in closings and risk of such is finally getting some attention. The issue for years has been the large percentage of a rural hospital’s budget that went unpaid due to patient debt and indigent care. In some hospitals, the percentage of these two items is more than 1/2 of the budget.

Per a February, 2019 article in Modern Healthcare called “Nearly a quarter of rural hospitals are on the brink of closing” by Alex Kacik: “Twenty-one percent of rural hospitals are at high risk of closing, according to Navigant’s analysis of CMS data on 2,045 rural hospitals. That equates to 430 hospitals across 43 states that employ about 150,000 people and generate about $21.2 billion in total patient revenue a year.

Hospitals are often the economic drivers of rural communities. Per capita income falls 4% and the unemployment rate rises 1.6 percentage points when a hospital closes, a related study found. Ninety-seven rural hospitals have closed since 2010, according to the University of North Carolina Cecil G. Sheps Center for Health Services Research.

They also broke the impact down by state, revealing that half of Alabama’s rural hospitals are in financial distress, the highest percentage in the country. At least 36% of the hospitals in Alaska, Arkansas, Georgia, Maine and Mississippi are in financial jeopardy.”

Most of the states in trouble chose not to expand Medicaid, but there are some who did or are now doing so. Per several studies by The Commonwealth Fund, RAND Corporation, Economic Policy Institute and George Washington University, expanding Medicaid would help patients, state economies and rural hospitals. Why? It would allow these hospitals to get paid and paid closer to the time of service reducing accounts receivables. Getting paid has an echo effect on employees and consumers.

This issue was brought home by two Republicans pleading with their party to acquiesce in states like North and South Carolina that did not expand Medicaid. GOP Governor John Kasich of Ohio, who ran for President, said Medicaid expansion is a “no brainer” and would add over $13 billion to Ohio over several years. Yet, the most dramatic plea was from Adam O’Neal, a GOP Mayor of a North Carolina town called Belhaven.

After failing to get the GOP majority in Raleigh to help save his town’s Vidant Pungo Hospital that served 20,000 people, he walked 273 miles to Washington, DC over 14 days. “You can’t let rural hospitals close across the country. People die,” O’Neal, told Modern Healthcare in 2014. Unfortunately, Vidant Pungo closed later that year (note a non-ER clinic opened in 2016).

You can add my pleas for help back then (and now). Folks, this stuff is real. I do not care if your tribe is blue, red, purple are chartreuse, hospital closings impact people’s lives and people’s livelihoods. Closings also hurt their community’s economy. My strong advice is for legislators to stop political posturing and do something. I do not care who wins or loses a political game. Stop focusing on keeping your job and do your job. You could start by expanding Medicaid, joining the other 36 states.

10 thoughts on “Rural hospitals closing at an alarming rate

  1. Good post Keith.
    Ironically we are suffering the same problem, only ours is caused by the government underfunding our sacred NHS
    (One commentator once wrote of the UK’s NHS that it was the closest thing the UK population has to a national religion)

    • Roger, it is common problem. Don’t fund what is needed and when things go poorly, the same folks say how could you let that happen. In the US, anything related to the ACA must be defeated as a political football. The GOP has even sabatoged the ACA. This hurts people.

      Our government used to compromise, but dating bsck to data-driven market segmentation, the words divide and conquer come to mind. Most of us are tired of this BS. Keith

      • I agree with you all the way Keith. And again the uncanny aspect is, we have the same basic problems. Poor funding, unnecssary layers of management, constant meddling and the political blame game

  2. Note to Readers: A concern of mine is how rural America continues to be an afterthought in America. Poverty exists in rural America as well. Yet, farmers are taking the brunt of the tariffs with a significant increase in bankruptcies, about double the number in the 2008 recession. As companies have chased cheap labor, moving jobs overseas or using technology and robotics, job retraining and investment in these areas have waned. Then, we have the healthcare issue noted above.

    We must invest in and support these communities. Repurposing unused assets using ABCD (Asset Based Community Development) such as historic property grants is critical. These might include redeveloping main streets, old mills, depots, malls, etc. I have seen an old court house made into an interactive museum, an old movie theater become a performing arts center, an old tobacco mill become a new business and residential area. In rural Vermont, they are paying off college debt to attract and keep talent. And, there is so much more that could center on community and tech colleges around retraining. And, we must deal with the opioid crisis that had creeped in as a pacifier.

  3. That’s a huge problem in Idaho, also. We have many far-flung communities that are hard to get to and not necessarily lovely places to live. The residents live pretty much off the land and hand-to-mouth. Some towns have been able to get some remote technology to help a little bit, but mostly people in those communities must drive long, windy, and often snowy roads for medical treatment. It’s a real hardship.

    And even though Idaho voters passed a ballot imitative last fall to expand Medicaid, our majority GOP leadership has been trying to water that legislation down with work requirements and all kinds of hanky panky. It is very frustrating to live in this beautiful but backward state.

    • Linda, the same thing happened in Maine, until the Governor was ousted. There is a lot of money being spent to defeat the ACA. Yet, the GOP does not have a replacement option. People’s welfare is the last thing being considered. And, sadly, people do not realize how much subterfuge as been done by my former party making premiums go up even more. Keith

  4. Note to Readers: When I first wrote of Adam O’Neal’s plea to save his hospital, I read that GOP lawmakers who had refused to help, noted that Democrats were using this story to defend the ACA. What is totally lost on these do-nothings is the man walked 273 miles over 14 days, but they still could not help because they would have been supporting the ACA which the other party did. That is poor.

  5. Dear Keith,

    This issue should be touted by Democratic Party candidates as a top priority in the upcoming 2020 elections. Frankly those GOP leaders who continue to block Medicaid Expansion need to be exposed for their hearts’ hardness.

    The healthcare issue was a winner for Democrats in 2018 and it will be a winner in 2020.

    Then there needs to be ADS detailing the cuts to rural hospitals that President Trump has recommended in his 2020 budget proposal.

    Hugs, Gronda

    • Gronda, the Dems need to do something now on healthcare and not wait until 2020. Shore up the ACA and create the debate for Medicare for all in 2020. Keith

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