Healthcare Triage: Rural Hospital Closures Impact the Health of a Lot of People

https://theincidentaleconomist.com/wordpress/healthcare-triage-rural-hospital-closures-impact-the-health-of-a-lot-of-people/

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Rural hospitals in the United States are having an increasingly hard time staying in business. Which is not great for the health of people who live in areas that no longer have a hospital.

This episode was adapted from a column Austin wrote for The Upshot. Links to sources can be found there.

 

 

 

 

GAO: rural hospital closures increasing, South hardest hit

https://www.healthcaredive.com/news/gao-rural-hospital-closures-increasing-south-hardest-hit/538604/

Dive Brief:

  • Hospitals across the U.S. are being battered by financial headwinds, and rural hospitals are vulnerable because they don’t have capital or diversified services to fall back on when the going gets rough. Between 2013 and 2017, 64 rural hospitals closed due to financial distress and changing healthcare dynamics, more than twice the number in the previous five years, a new Government Accountability Office analysis shows.  
  • Rural hospital closures disproportionately occurred in the South, among for-profit hospitals and among organizations with a Medicare-dependent hospital payment designation.
  • One potential lifeline was Medicaid expansion. According to GAO, just 17% of rural hospital closures occurred in states that had expanded Medicaid as of April 2018.

Dive Insight:

Declining inpatient admissions and reimbursement cuts have taken a toll on rural hospitals. Since 2010, 86 rural hospitals have closed, and 44% of those remaining are operating at a loss — up from 40% in 2017.

CMS Administrator Seema Verma released a rural health strategy in May aimed at improving access and quality of care in rural communities. Among its objectives are expanding telemedicine, empowering patients in rural areas to take responsibility for their health and leveraging partnerships to advance rural health goals.

The agency also expanded its Rural Community Hospital Demonstration from 17 to 30 hospitals. The program reimburses hospitals for the actual cost of inpatient services rather than standard Medicare rate, which could be as little as 80% of actual cost.

Such initiatives can be helpful, but if a hospital can’t make ends meet on its Medicare and Medicaid businesses and has only a modicum of privately insured patients, “that’s just not a balance that works financially,” Diane Calmus, government affairs and policy manager at the National Rural Health Association, told Healthcare Dive recently.

In all, 49 rural hospitals closed in the South, or 77% of rural hospital closures from 2013 through 2017, according to GAO. Texas had the most closures with 14, followed by Tennessee with eight and Georgia and Mississippi, each with five. By contrast, there were eight rural hospital closures in the Midwest and four each in the West and Northeast.

GAO also looked at closures by Medicare rural hospital payment designation. Critical access hospitals made up 36% of rural hospital closures, 30% were hospitals receiving Medicare standard inpatient payment, 25% had Medicare-dependent hospital designation and 9% were sole community hospitals.

To aid rural hospitals and ensure access for patients, NRHA has urged CMS to adopt a common sense approach to the “exclusive use” standard and lobbied lawmakers to pass legislation eliminating the 96-hour condition of payment requirement, two policies that are particularly hard on rural providers.

Another bill, the Save Rural Hospitals Act, would reverse reimbursement cuts to rural hospitals, provide other regulatory relief and establish the community outpatient hospital, a new provider type offering 24/7 emergency services plus outpatient and primary care.

 

 

 

 

 

Just how bleak is the financial outlook for rural hospitals?

https://www.healthcarefinancenews.com/news/just-how-bleak-financial-outlook-rural-hospitals?mkt_tok=eyJpIjoiWm1abU9EWXhZMlppT0dSbSIsInQiOiJtQm1aMUNkVFBZWmNoUlpQMHRkOHBJcHlEMTg1MDRCa2xPR3h0bXJLWDVjSG1pZU5kZmx5ejNDbWFxMTRHVWR4N0FrQzA4cGgzXC9IdlpLMlBHcFBWemhOWTc3SHR0QUJjdXcxcHk2TTRBZFZxTk55Sis5NVJ2TnRyWFpyaHVWcVMifQ%3D%3D

Nearly half are operating with negative margins, according to new research, which says a high rate of uninsured patients is among the reasons.

With healthcare services being concentrated more and more among major health systems and larger providers, rural hospitals are struggling.

A new study from Chartis Group and iVantage Health Analytics sheds light on the scope of the problem. About 41 percent of rural hospitals faced negative operating margins in 2016, the report found.

If those hospitals were located in a state that elected not to expand Medicaid under the Affordable Care Act, those margins were generally worse than those of their peers, suggesting that such expansion had a mitigating effect on financial pressures.

Due to those financial pressures, 80 rural hospitals closed from 2010 to 2016, indicating that the rural health safety net has seen better days.

One of the key factors behind this was a high rate of uninsured patients, and a payer mix heavy on public insurers with lower claims reimbursement rates. More patients are seeking care outside rural areas, which isn’t helping, and many areas see a dearth of employer-sponsored health coverage due to lower employment rates. Many markets are also besieged by a shortage of primary care providers, and tighter payer-negotiated reimbursement rates.

Demographics aren’t helping rural hospitals, either. Patients in rural markets are generally more socioeconomically disadvantaged, with many patients over 65 years old and suffering from multiple health disparities, which lead to higher general healthcare costs.

To make matters worse, there’s a shortage of physicians in rural communities as well, with only about 39.8 physicians per 100,000 people. By contrast, the ratio in non-rural areas is 53.3 physicians per 100,000 people.

All this comes at a time when the shift from fee-for-service payment models to value-based reimbursement is in full swing, putting pressure on all hospitals to reduce costs — which is especially problematic for rural hospitals given that their demographic and staffing challenges have a tendency to drive costs up, not down.

The researchers pointed to the Graves-Loebsack Save Rural Hospital Act as a possible means of mitigating the problem. The bill, introduced by the House in 2015, would create a payment structure whereby 105 percent of “reasonable” costs would be reimbursed; 100 percent of bad debt would be reimbursed; and rural hospitals would be exempt from 2 percent of sequestration of payments.

The authors suggested revisiting the bill, which would also establish the Community Outpatient Hospital Program, a measure aimed at preserving emergency and outpatient care for rural markets. It would also recoup $5.4 billion in lost Medicare reimbursement among rural hospitals over 10 years.

 

 

A Long Road to Care for Rural Californians

https://www.chcf.org/blog/long-road-to-care-for-rural-californians/

Cramped rural hospital in Happy Valley California

In the northeast corner of California, nearly kissing Nevada and Oregon, lies Surprise Valley. At approximately 70 miles long, the valley is home to 1,232 people, which works out to about two people per square mile. Services are sparse: The Chamber of Commerce website lists two grocery stores, one insurance agency, and one hospital with an emergency room to provide care to its residents.

Essential CoverageThat hospital, Surprise Valley Community Hospital, is a vital institution, but it is bankrupt. Barbara Feder Ostrov of Kaiser Health News reports that years of mismanagement caught up to the hospital in 2017. By the time state inspectors arrived that June, the hospital was in a state of disarray — crushed by debt, it had only one acute care bed and a chief administrator who was MIA. Residents of Surprise Valley were torn between keeping it open and shuttering it even though the nearest hospital with an emergency room is 25 miles away on the other side of a mountain pass. In the June 5 California election, county voters chose to sell the hospital to an out-of-state entrepreneur rather than risk the hospital’s closure.

Surprise Valley isn’t alone in its lack of access to health care. Since 2010, 83 rural US hospitals have closed, Michael Graff writes in the Guardian. For residents of rural areas, the closure of the local hospital can cut off a lifeline. When Portia Gibbs of Belhaven, North Carolina, had a heart attack in 2014, her husband, Barry, had to choose between driving her 60 miles east to a hospital in Nags Head or 70 miles west to a hospital in the town of Washington. Portia never made it to a hospital.

It’s difficult to attract physicians and hospitals to rural areas, where wages and reimbursement rates tend to be lower. “What happens is if you’re a cardiologist you have a tendency to move to the East Coast where you can get paid more for the same procedure,” said US Senator Jerry Moran (R-Kansas) in a meeting with HHS Secretary Alex Azar, according to Modern Healthcare.

Solving the Rural Hospital Puzzle

There is no easy fix for the decline in the number of rural hospitals, but Moran and other senators have proposed fixing the Medicare wage index. The index, which factors into reimbursement of hospitals serving Medicare patients, is a formula that accounts for geographic differences in wages and the cost of living. Some lawmakers contend that the formula penalizes rural hospitals and exacerbates the hospital shortage. Updating the index to increase payments to Medicare providers in underserved areas could draw more physicians to rural hospitals, which could help prevent hospitals from going under.

Some rural hospitals have tried another solution: joining multihospital systems. In California, where 25% of rural hospitals have closed over the past two decades, 19 rural hospitals have combined forces in systems composed of at least two other hospitals. However, our analysis of six of these hospitals showed mixed results for this strategy: The financial status of one rural hospital improved substantially after joining a system, but two others saw lower net income.

Perhaps a more feasible solution to lack of access to care in rural areas can be found in expanding the health care workforce. A study published in Health Affairsfound a growing presence of nurse practitioners (NPs) among rural practices nationwide. From 2008 to 2016, the number of NPs in rural areas increased 43%. Not surprisingly, “states with restricted scopes of practice had lower NP presence and slower growth.” The authors conclude that “adding nurse practitioners is a useful way for practices to align themselves with contemporary efforts to improve access and performance.”

It seems fitting and bittersweet to end this edition of Essential Coverage with our tribute to the late Herrmann Spetzler, the visionary CEO and the heart of Open Door Community Health Centers in rural Humboldt and Del Norte Counties. To underscore his commitment to providing health care in remote locales, he often described himself in meetings and speeches as “Herrmann Spetzler, RURAL.” Spetzler’s unexpected death in March cut short his life’s work to provide health care to everyone, regardless of income or geography. His passing leaves a huge hole in the community he served.

 

Texas rural communities endangered as spiral of hospital closures continues with two more

http://www.healthcarefinancenews.com/news/texas-rural-communities-endangered-spiral-hospital-closures-continues-two-more?mkt_tok=eyJpIjoiT0RabE1UVmtZamMzTldOaCIsInQiOiJIRmpRNFJxRnFHbG9vRGV6UXZGMzZJbmZXOEZRczZRcktRb3Z4VzZHQ01UYUdoVElGRlNGVTUrRytER3FteTZSMTdXMjdjM0dlVnlrT01CS2RSNDhCa2tuRTNvbkhVMmlkU0RWQ3pvQ0lrTGVPMnkyUG8ySGJOaGhQc0FLbWUyaSJ9

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A hospital in Trinity, Texas closed on August 1, and another in Crockett, Texas on July 1.

In what advocates say is a continued downward death spiral for their state, two more Texas rural hospitals closed for good earlier this week, bringing the total count of rural hospital closures in the Lonestar State to 18 in the last four and a half years alone, according to the Texas Organization of Rural and Community Hospitals or TORCH.

A hospital in Trinity, Texas closed on August 1, and another in Crockett, Texas on July 1. The closures leave those communities without immediate access to emergency and other hospital care services.

“This closure crisis, which has left many rural communities without emergency and other care, has clearly reached epidemic proportions and unless the Texas Legislature and Congress take immediate steps, it will only worsen,” said Dave Pearson, CEO of TORCH.

TORCH represents the 163 rural hospitals in the state of Texas. Of the 18 closures, they noted that four were temporary closures and three were replaced with free-standing ERs. Still, the organization said the care is those towns is now very limited, and 11 communities have no hospital or emergency care.

Many more are teetering on the edge of closure, Pearson said, with a third of the remaining rurals operating on “shoestring budgets” and struggling to keep their doors open. The worst part is these situations could be avoided he said, and are largely due to Medicare cuts in recent years totaling more than $50 million and Medicaid underpayments to rurals that total close to $60 million each year.

Torch Director of Government Relations Don McBeath said these closures and the resulting lack of access to emergency care has resulted in “documented deaths” because the local hospital was not there to service those patients.

Additionally, the closures have a devastating impact on both the local and state economies.  Rural hospitals cover 85% of the state’s geography and serve 15% of the population. That population, kept healthy by the presence of their rural hospitals, drives the state economy, from food production to fuel. David Byrom, CEO of Coryell Hospital in Gatesville, said each Texas rural hospital employs an average 173 people and has $23 million in yearly payroll. That equals more than 22,000 jobs and expenditures of $3.7 billion a year, for a combined economic impact of more than $18 billion a year.

“The citizens of our rural communities fortunate enough to still have a rural hospital need to know this is happening around them and call their elected state and federal representatives and tell them to take action now to stem the tide of Texas’ rural hospital closures. The two closures in the last month, bringing the total to eighteen in the last four and a half years, could be the tip of the iceberg.”

Pearson said the closures have the potential to crush their local community economically and send residents moving out of town looking for jobs.  Local businesses and schools will suffer as well, and the chances of bringing future economic development are hurt.

The Texas state legislature has recently instructed the state Department of Health and Human Services to look into the ongoing situation but that could move too slowly to stem more closures. “With a two-year study window, followed by who knows how much time to react to the findings, we could see dozens more of Texas’ rural hospitals vanish.”

Obamacare Repeal Could Push Rural Hospitals to the Brink

http://www.thefiscaltimes.com/2017/01/05/Obamacare-Repeal-Could-Push-Rural-Hospitals-Brink?utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_source=hs_email&utm_medium=email&utm_content=40201659&_hsenc=p2ANqtz-8KqKXcgqf_db4edAlc57mjW0ZBhwKkpUjZiSlsuEm5fUpTtlY79dLUg_WR5hqtaQqIpmHbr1QCs8iiVNz7EsE_1FhovQ&_hsmi=40201659

Many of the rural hospitals and health centers serving 62 million Americans have operated on a shoestring for years.

Since January 2010, 80 rural hospitals and health care facilities that provided treatment to large numbers of elderly and low-income families were forced to close for financial reasons. More than 670 of the remaining 2,078 facilities are vulnerable or “at risk” of closure, according to hospital industry experts.

For many of those hospitals, the Affordable Care Act (ACA) was a lifeline, providing millions of their patients with the financial wherewithal to obtain health care treatment and prescription drugs without having to turn to emergency rooms for assistance.

But as the new Republican Congress and GOP President-elect Donald Trump press to repeal Obamacare in the coming months with no suitable replacement in hand, rural hospital officials say they are facing a “triple whammy” of lost financial benefits that could force many of the remaining rural hospitals out of business in the coming decade.

“We’re in the midst of a rural hospital closure crisis right now, and that is with the ACA currently in place,” Alan Morgan, the CEO of the National Rural Health Association, said in an interview Thursday. “Looking at our projections for where we’re headed, at the current rate we could see a third of all rural hospitals closed within the next decade.”

The advent of Obamacare enabled 1.7 million rural Americans to purchase subsidized private coverage on government operated exchanges last year, an 11 percent increase from 2015, according to the U.S. Department of Health and Human Services. Millions more obtained expanded Medicaid coverage for low-income adults in rural states that opted into the program under Obamacare.

A state-by-state breakdown of 71 rural hospital closures

http://www.beckershospitalreview.com/finance/a-state-by-state-breakdown-of-71-rural-hospital-closures.html

More than 70 rural hospitals have closed since 2010 — and many more may be headed down the same path.

Rural hospitals are facing a myriad of financial challenges, and those in states that have not expanded Medicaid are feeling the most financial pressure. Sixty-three percent of hospitals vulnerable to closure are in states that have not expanded Medicaid, according to a report from iVantage Health Analytics, a firm that compiles a hospital strength index based on data about financial stability, patients and quality indicators.

Here are 25 states that have closed at least one rural hospital since 2010, according to research from the North Carolina Rural Health Research Program. For the purposes of its analysis, the NCRHRP defined a hospital closure as the cessation in the provision of inpatient services. Although all of the facilities listed below no longer provide inpatient care, many of them still offer services, including outpatient care, imaging, emergency care, urgent care, primary care or skilled nursing and rehabilitation services.