September 8, 2015; Arizona Public Media
Kate Sheehy at AZPM asks why rural hospitals are closing—57 in the last five years alone, including the Cochise Regional Hospital in Douglas (population 16,915) on the Arizona-Mexico border. If she had attended the National Rural Assembly conference this past week, she would have learned from Alan Morgan of the National Rural Health Association that that number will soon increase to 58. According to Morgan at the Rural Assembly, a hospital in Independence, Kansas (population 9,230)—Mercy Hospital—will close shortly.
Earlier this year, the National Rural Health Association identified 283 rural hospitals in danger of shutting down. That is ten percent of all rural hospitals in the nation.
With the closing of the hospital in Douglas, the nearest hospital is in Bisbee (population 5,360), twenty miles away. Douglas’s fire chief, Mario Novoa, has his ambulances transporting patients to Bisbee about a dozen times a day, a strain on his staff whose responsibilities cover a 1,500-square-mile area, but he recognizes the equally significant impact on the survival and stability of the community at large. “We’ve always had a hospital here. When I was a kid, we had two hospitals here. So it was very, very disheartening to know at this day and age, no hospital,” he said. Sheehy reports that residents in Douglas fear that without a full-service hospital, “the town will shrivel away.”
Sheehy cites Maggie Elehwany, the vice president of government affairs with the National Rural Health Association, who reports that 43 percent of rural hospitals, designated as “critical access,” are operating at a loss. “Per capita, rural patients are older, poorer, so there’s a higher dependence on Medicare and Medicaid, and they’re actually sicker. They have a higher percentage of chronic disease,” Elehwany said.
According to Elehwany, rural hospitals had anticipated that they would be serving more insured people as a result of the Affordable Care Act, as a result of which the government assumed that it could reduce “disproportionate share payments” for critical access rural hospitals. However, because many rural states didn’t expand Medicaid, rural hospitals still had to absorb many uninsured patients, but with lower disproportionate share payments from the federal government.
Unlike many other Southern and Southwestern states, Arizona did expand Medicaid eligibility according to Sheehy, but a new state assessment on hospitals in the state undid the financial benefit of more patients with insurance coverage. Jim Dickson, the CEO of the Bisbee hospital, Copper Queen Community Hospital, has been experimenting with new business models to generate resources that small rural hospitals need to compensate for their insufficient numbers of patients. Copper Queen apparently is focusing on outpatient care as its means of staying profitable.
The shutdowns of rural hospitals are a nationwide phenomenon. In West Tennessee, three rural hospitals closed in 2014, and Methodist Healthcare-Fayette Hospital closed in the spring of 2015, attributable to the state’s failure to expand eligibility for TennCare despite the hospitals’ facing reduced disproportionate share payments. The county seat of Fayette County, Somerville, where the hospital was located, has a population of 3,100. In August, the Nye Regional Medical Center in the mining town of Tonopah, Nevada (population 2,478), closed.
There may be solutions for some individual rural hospitals—for example, partnering with larger, more financially stable hospitals, such as the hospitals that have linked up with the Tucson Medical Center to form the Southern Arizona Hospital Alliance, or actual hospital mergers such as Caverna Memorial Hospital in Horse Cave, Kentucky (population 2,252) merging with the Commonwealth Health Corporation, the parent company of the Medical Center at Bowling Green, and Fleming County Hospital in Flemingsburg, Kentucky (population 2,694), which is being acquired by LifePoint Health. Individual solutions may work here and there, but the rural hospital crisis is structural: inadequate Medicaid expansion, reduced disproportionate care reimbursements, penalties for Medicare readmissions, and higher costs of service due to lower numbers of patients.
The reasons for closing Cochise in Douglas, Mercy in Independence, and Nye in Nonopah are easily pinpointed and understood. That ought to make the solutions available to Congress, through legislation pending in the House and the Senate to save rural hospitals, comparably easy to address and enact. All Congress needs is the political will to do so—and nonprofit advocates should be pushing on Congress for action and pushing on states to expand Medicaid eligibility.—Rick Cohen