NRHA warns Wall Street Journal readers: It’s “crisis mode” for rural health

The Wall Street Journal’s Valerie Bauerlein contacted the National Rural Health Association to put the recent increase in rural hospital closings into perspective.

NRHA’s Maggie Elehwany told her: “We are in crisis mode. We’ve got gale-force winds coming from one direction, the tide coming in from another and it’s really hitting these small hospitals who operate at tiny margins.”

More rural hospitals have closed in the last year than in the past 15 combined.

Here’s the full May 11 Journal article, which highlights rural hospital statistics nationwide, plus struggles and possible solutions in North Carolina, South Carolina, Georgia and Massachusetts:

Rural hospitals feel pinch
Financially strapped facilities squeezed further by Medicare changes, dwindling government subsidies
By Valerie Bauerlein

BELHAVEN, N.C. — Last year, 12 people here, including the pastor of the town’s Methodist church, were treated for heart attacks at Vidant Pungo Hospital, a local landmark that is a quick walk from the town’s main traffic light.

And in the middle of one recent night, Arthur Bonner, a 63-year-old retired salesman, drove himself to the emergency room with a debilitating attack of gout. “I was in serious pain that you can’t even imagine,” he said.

Now, Belhaven’s mayor and other local leaders are trying to scrape together $3 million to take over the hospital from its owner, which has said it plans to close it this summer. The aging facility serves fewer than 20 people a day and is getting squeezed by changes in Medicare and Medicaid reimbursement, according to Vidant Health, a nine-hospital network affiliated with East Carolina University and based in Greenville, N.C.

“It’s a convergence of forces” that prompted the decision to close, said Vidant’s chief executive, David Herman.

But closing the hospital would put some residents, including many with chronic illnesses, a 75-minute drive away from an emergency room, said Mayor Adam O’Neal. The hospital also is the largest employer in Belhaven, with a population of less than 1,700. “It’s the heart of our town,” said Mr. O’Neal, a Republican.

Rural hospitals have long been under financial pressure from the rising cost of providing health care, the dwindling number of patients staying overnight and the shift of more profitable services like cardiac care to bigger medical centers.

Now, the Obama administration, saying that some rural hospitals have been receiving subsidies they weren’t meant to get, has proposed eliminating a further $2.1 billion in Medicare payments next fiscal year for hospitals designated as providing “crucial access.”

In addition, under the new federal health law, hospitals are losing government subsidies for providing care to the uninsured. The law envisioned that those who couldn’t afford insurance would be covered by an expansion of Medicaid, but two dozen states, including North Carolina, opted not to do so.

Health advocates say a disproportionate number of working poor people who might qualify for Medicaid after an expansion live in rural areas and may have trouble getting treatment.

“We are in crisis mode,” said Maggie Elehwany, vice president of the National Rural Health Association. “We’ve got gale-force winds coming from one direction, the tide coming in from another and it’s really hitting these small hospitals who operate at tiny margins.”

Rural hospitals are particularly sensitive to changes in Medicare and Medicaid payments, because about 60% of their revenue comes from the government, according to the American Hospital Association.

The number of rural hospitals nationwide has been relatively stable at about 2,000 since the late 1990s, the NRHA said. But at least 14 closed in 2013, and many more are expected to follow suit, according to the University of North Carolina at Chapel Hill.

In Georgia, which isn’t expanding Medicaid, Republican Gov. Nathan Deal has created a Rural Hospital Stabilization Committee and is letting rural hospitals focus on emergency care to “save lives and maintain communities.” The changes could potentially help reopen some of the four Georgia hospitals that closed in the past two years, advocates say.

In South Carolina, which also isn’t expanding Medicaid, Republican Gov. Nikki Haley is working with a Democratic state senator on a bill that would accelerate the reopening of closed hospitals, like the one in their shared hometown of Bamberg. She also has raised the rates the state pays rural hospitals for treating the uninsured.

Massachusetts leaders moved quickly last month to push for the reopening of North Adams Regional Hospital, which closed its doors abruptly in March. A hospital chain agreed to buy the unprofitable operation, and elected officials have asked the federal government to expedite the licensing of the new owner.

Belhaven’s Pungo Hospital already was losing money when a not-for-profit board decided to turn it over to Vidant Health, which pledged to update the building and pay for $2 million in upgrades such as electronic record-keeping. But last fall, Vidant said it would have to close Pungo and replace it with an urgent-care facility by 2015. Such facilities provide much more limited services than hospitals, and no inpatient care.

The average daily number of patients in the 49-bed hospital was about four in 2013, Vidant said. Admissions dropped 30% in five years, and lab tests were off 40%. Medicare and Medicaid cuts had made Pungo’s financial hole much deeper, Dr. Herman said.

On a recent afternoon, there were no clients in the ER waiting room and no one in the hospital lobby. The hospital sees about 15 patients in the emergency room a day and admits about two people, most of whom are kept long enough to calibrate medications, treat pneumonia or stabilize before transporting them to a larger facility, Vidant said.

Mr. O’Neal, the mayor, joined the state NAACP in protesting the closure, saying it would disproportionately affect poor black people in the surrounding two-county area. Vidant agreed to keep the hospital open until July 1, turn it over to a new not-for-profit board and contribute $1 million to the board’s efforts. The mayor’s group has yet to line up a management structure for the hospital, but he is optimistic it will come together.

“It’s not good for our country to get rid of our rural hospitals,” he said. “We’re going to lose health care in an area that can’t afford the loss of anything else.”