Kaiser Study: Rural Hospitals Close for Many Reasons - North Carolina Health News
By Thomas Goldsmith
Across the United States, 76 rural hospitals have closed since 2010, three of them in North Carolina.
A new report by the Kaiser Commission on Medicaid and the Uninsured attributes rural hospital closings to a broad range of factors.
They include, but aren’t limited to, corporate decisions on profitability, lack of community expertise in dealing with large health-care organizations, changes in federal reimbursement policies, and some states’ decision not to expand Medicaid.
The authors interviewed dozens of people involved with the closure of three rural hospitals.
Those interviewed cited a shift from “mission” – a focus on care – to “margin” – a focus on the bottom line – as a major factor in the hospital closures. They also cited a lack of consideration or planning for the impact on the community, according to the study’s authors.
“A number observed that local residents and public officials often lack the expertise or experience needed to negotiate with large corporate health systems,” they wrote. “And [they] have limited understanding of the transformations taking place in health care delivery and payment systems.”
New models needed
The study looked at three rural hospitals that had closed, in South Carolina (Marlboro Park Hospital in Bennettsville), Kentucky and Kansas.
» Closings reduced access to care not only because of the lack of facilities, but also because health professionals leave when they have no place to work. Transportation also becomes an issue, particularly for older and low-income people.
“Elderly and low-income individuals were more likely than others to face transportation challenges following the closures, and were thus more likely to delay or forgo needed care,” the authors said.
» New models of care may be required to make up for the absence of hospitals in rural areas. That, in turn, may call for changes in the way Medicare and Medicaid pay for that care, something that’s proposed in the federal Save Rural Hospitals Act that’s been introduced in Congress.
“A state’s decision about the Medicaid expansion has an important impact on hospital revenues and access to care, but the sustainability of rural hospitals depends on a broader set of factors,” the report said.
Mark Holmes, director of the N.C. Rural Health Research Program, said in an email Tuesday that the Kaiser report brought appropriate balance to the discussion of rural hospital closings.
“This is valuable work that looks carefully at the root causes of rural hospital closures,” Holmes wrote. “There have been many popular anecdotes, often conflicting, on the primary cause of closures; this study shows that there is no one root cause.”
Thomas Ricketts, a professor of policy at UNC-Chapel Hill and the founding director of the North Carolina Rural Health Research Center from 1988 to 2000, pointed to demographics as among the causes for rural hospital closures.
“You’ve got counties in North Carolina that are losing population,” Ricketts said Tuesday. “That makes it tough to run any sort of service organization, let alone a hospital.”
A study published in March by the NC Rural Health Research and Policy Analysis Center, “2012-14 Profitability of Urban and Rural Hospitals by Medicare Payment Classification,” shows the profitability of urban hospitals has increased steadily during recent years, while margins for rural hospitals have fallen. As a result, the search for alternative means to meet rural health needs can take variety of forms.
“You might want a health center, something that functions as a transitional center,” Ricketts said. “Emergency rooms in small rural hospitals are not really a good idea.”
Franklin County, north of Raleigh, has been in negotiations with at least two health-care networks to establish an emergency department at the former county hospital location in Louisburg, which Novant closed last year. Such an arrangement could have a negative effect, though, if patients had to go through treatment in a series of locations, depending on the acuteness of their health needs, Ricketts said.
In each of the three communities in the Kaiser study, loss of emergency care was identified as a major impact of the hospital’s closing. Stakeholders from across the communities, including providers, took part in the surveys.
“[Stakeholders] pointed out that the hospitals’ EDs had also served as a safety-net for people with acute mental health or addiction treatment needs by stabilizing them and arranging for their transport when needed; when the hospital closed, local capacity to address these needs disappeared,” the authors said. “Respondents cited the immediate and ongoing need to ensure emergency transportation to neighboring hospitals following the closure.”
A number of hospitals in counties close to urban areas have been acquired by larger health-care networks, giving them better chances for survival under consolidation, Ricketts added.
The odds are longer for facilities in remote areas.
“They are not totally alone, but they are often isolated,” he said.
Ricketts noted that hospitals are increasingly affected by the fact that hospital systems that are buying up individual physician practices.
“That actually has an effect on the rural hospitals,” he said. “If they are excluded from that network … that can be a death knell.”
Holmes, co-director of the Program on Healthcare Economics and Finance at UNC-Chapel Hill’s Cecil G. Sheps Center for Health Services Research, said in his email that closures are “intensely local.”
“Although the environment (e.g. state and federal policy, or market forces, or demographic changes) may make closures more likely, typically the closure is rooted in circumstances specific to the hospital and its community,” he wrote.
“The primary takeaway, therefore, is that although we can work to make the environment more supportive of rural hospitals, ultimately the solutions have to be local.”