Small, rural hospitals throughout the country are struggling to stay in business.
By Taylor Sisk
The citizens of Yadkin County aren’t alone in their uncertainty about the future of health care in their community, though with the closure of Yadkin Valley Community Hospital they have more urgent decisions to be made than most.
But Yadkin County is only one of of many rural communities across the nation grappling with the question of how to keep their hospitals afloat against a rising current of challenges.
Hospitals are cornerstones. Beyond meeting a community’s medical needs, “A hospital is an economic-development tool,” said Yadkin County Manager Lisa Hughes.
Mark Holmes, a UNC-Chapel Hill health economist, agrees, citing the quality-of-life aspect of a local hospital.
“When a manufacturer opens a large facility, managers are going to be moving in and they’re going to want the things they value, and included in that would be a hospital,” Holmes said. “I think that aspect sometimes gets lost when we talk about closures and their impact on rural communities.”
“We’re looking at all the options,” Hughes said of local government’s efforts to reestablish accessible medical care for Yadkin County. “We’re looking at what the citizens need.”
As she and her colleagues do so – as they weigh the pros and cons of maintaining a rural hospital – a number of factors must be taken into consideration.
According to iVantage, the closure of those hospitals would mean that “700,000 Medicare patients would have to seek care farther from home, 86,000 jobs could be lost in rural communities and it would result in an estimated $10.6 billion loss to the GDP.”
Many factors put rural hospitals at risk.
For starters, rural hospitals receive more patients with no form of health coverage than their urban counterparts, and, on average, operate on tighter margins.
As an outcome of the March 2013 federal sequestration, those margins are tighter still. iVantage estimates the resulting cuts to Medicare will deliver a staggering blow to rural hospitals: $2.8 billion in lost reimbursement and at least 30 hospitals shifting from profitable to unprofitable.
Rural hospitals were also hit by a reduction in bad-debt reimbursement, money paid by Medicare to hospitals for helping shoulder the cost of care for those who can’t pay.
Demographic factors also come into play. Many rural communities have declining, aging populations, and the younger folks who stay around are more likely to want to drive to larger, urban hospitals.
It’s also difficult to recruit doctors to rural areas.
And the reality is that in many ways, the old model for a small hospital no longer works. Many procedures that once required an inpatient stay are now performed as outpatient services.
Yadkin Valley Community Hospital had 22 beds, but Hughes said that on average only five to seven were occupied. According to UNC’s Cecil G. Sheps Center for Health Services, the typical rural hospital averages only seven inpatients each night.
Then there’s the issue of Medicaid expansion.
Expanding Medicaid, said Duke University health economist Don Taylor, “is the simplest, most effective way to support rural hospitals that exists.”
But North Carolina’s legislators – and those in 19 other states, each with significant rural populations – have declined to do so.
“I actually think that expanding Medicaid is one of the most devastating things you can do to rural health,” Sen. Ralph Hise (R-Spruce Pine), co-chair of the Senate Health Care committee, said during a press conference at the General Assembly in mid-August.
Hise argued that having more patients on Medicaid would guarantee “there is no opportunity for [rural hospitals] to ever operate in a profitable manner.”
Maggie Elehwany, the National Rural Health Association’s vice president for government affairs and policy, doesn’t see it that way. It’s “undeniable” that more rural hospitals have closed in states that haven’t expanded Medicaid, she said.
“It’s more than a coincidence,” Elehwany asserted. “You can’t deny that it’s a contributing factor.”
A 2014 Robert Wood Johnson Foundation study determined states that have elected not to expand Medicaid (24 states at the time) “are foregoing $423.6 billion in federal Medicaid funds from 2013 to 2022, which will lessen economic activity and job growth.”
Hospitals in those states, the study found, will “lose a $167.8 billion (31 percent) boost in Medicaid funding that was originally intended to offset major cuts to their Medicare and Medicaid reimbursement.”
According to the Kaiser Family Foundation, 3.7 million poor, uninsured adults in states that haven’t expanded Medicaid fall into a coverage gap, and will likely remain uninsured.
Kaiser found that one in 10 of those who fall into that gap are North Carolinians.
So what might the rural hospital of the future look like?
It will depend on the size of the community.
Last year, Anson County (pop: 26,161) opened a new hospital that employs an innovative design to offer a wide range of services, but that averages only two or three inpatients a night, with an average stay of 48 to 72 hours, primarily for observation. Acute cases are transported to larger neighboring hospitals.
The county had contracted with a hospital system, Carolinas HealthCare, since the ’90s to operate its old hospital, and CHC had the resources to provide the kind of facility that most rural communities can’t likely offer without such a partner.
Legislators in Georgia, where five rural hospitals have closed since 2010, have proposed a model that offers the promise of serving the state’s most remote areas.
It’s a hub-and-spoke model. One community will provide a hospital, health clinic, nursing home and home health services. In more remote communities are the spokes: critical access hospitals, nonprofit federally qualified health centers, school-based telehealth, telehealth-equipped ambulances, public health departments and locally based doctors.
Several North Carolina communities are today using elements of this hub-and-spoke approach.
In Halifax County – an expansive, predominantly rural county – transportation is a major issue. The Rural Health Group, a federally qualified health center, works very closely with Halifax Regional Medical Center and the county health department to reach far into the county’s recesses. It has a health center in the community of Hollister (pop: 674), and CEO Brian Harris says it’s a busy one.
A ‘vital role’
James McGrath, medical director of the presently closed Yadkin Valley Community Hospital, delivered a baby during a snowstorm back in February, when the mother was unable to get to her ob-gyn in Wilkes County. It was the first baby he’d brought into the world in 24 years.
“It was déjà vu – that noise of the monitor,” McGrath said.
The family was certainly appreciative that McGrath and the hospital’s facilities were available to deliver in the crunch.
Rural health care “plays a vital role for communities across America,” wrote the authors of iVantage’s “Rural Relevance under Healthcare Reform: Vulnerability to Value” study, “serving nearly 80 million of the population. The services provided in rural America are similar to those needed in any major metropolitan area, yet the volumes and economic resources provide little economies of scale, making for little benefit from scale.”
The study concluded that “rural hospitals do focused and good work overall … and provide essential primary care.”
“In North Carolina, we have a history of being highly innovative, of trying new things,” Mark Holmes told N.C. Health News in a May interview.
“The health care industry is in major flux, Holmes said, but, “I’m optimistic that in the face of these declining counts and the challenges that are pushing stressors on the heath care system, we’ll be able to come up with models that meet our needs.”
Denise White, chief of nursing at the Anson County hospital, acknowledged that, “We’re going to stub our toe sometimes. There are things where we’re going to be, like, ‘What were we thinking?’”
“But,” she said, “you’ve got to take a risk.”
Additional reporting provided by Rose Hoban.[box style=”2″]This story was made possible by a grant from the Winston-Salem Foundation to examine issues in rural health in North Carolina. [/box]