An analysis of CMS (Center for Medicare & Medicaid Services) data by Navigant suggests that about 20% of US rural hospitals are at risk of closure, this data does not consider all the hospitals that have already closed down. Researchers used a benchmark of an average 1.4% operating margin over the past three years, 78.5 days cash on hand and 49.8% debt-to-capitalization ratio to determine financial viability. Based on this benchmark, 23 – 50% of rural hospitals in states like West Virginia, Oklahoma, Mississippi, Alabama, Kentucky, Missouri and South Carolina are at risk of insolvency. These states unfortunately are among the 7 states reported by the CDC (Center for Disease Control and Prevention) as having rural HIV epidemics. Alabama currently has 50% of its rural hospitals meeting this benchmark. Currently the Alabama Hospitals Association is pushing for Medicaid Expansion in Alabama. One Republican State Senator Jabo Waggoner had appeared to support this push but on a subsequent interview back pedaled on a prior statement requesting the State may need to consider Medicaid Expansion.
A Kaiser Family Foundation Health Report suggests that as at November 2018 only 2 of these states Kentucky and West Virginia have taken advantage of Medicaid Expansion. Looking at the intersection of all these health issues; rural HIV epidemic, financially distressed rural hospitals in States that failed to expand medicaid when the ACA was passed one may ask the question; “Are these issues related?”
The easy answer to such a question is “possibly”. The truth though is that rural hospital closures have been a fact of life and will continue as our health system shifts focus from sick care to wellness care and maintenance. The continual population declines as a result of a slow or stagnant economic growth in rural America and improved health technology means that most hospital beds in such places never reach full occupancy or tend to be occupied by individuals who do not meet current criteria for hospitalization. What these states lacked was the infusion of federal dollars which could have helped some of these failing hospitals hold on a little longer.
On the long run though for some of these rural hospitals to survive they must evolve with our health systems into outpatient and urgent care centers. Running a full service hospital requires having services like stroke, cardiac units and ICUs that are expensive to run in low volume centers in communities with declining populations. Medicaid Expansion may very well be the magic bullet for some of these rural hospitals. Whilst this does not change the poor economic base of these communities and its resulting low health sector revenues it would most likely allow some cash infusions that may kick the problem down a few more years.
At this time other than a few Midwestern states almost all the 14 states that have not expanded Medicaid are former Confederate States. I sometimes ask myself if the refusal to avail themselves of federal dollars which their population obviously desperately needs has more to do with fiscal difficulties or political expediency than the personality of the main architect of the Affordable Care Act, President Barack Obama.
Whatever the reasons for refusing Medicaid Expansion these states have a significant health system problems judging by their inability to control the HIV epidemic when most states are seeing declines in new infections. To address these problems these states could utilize some of these solutions.
- Invest in telemedicine infrastructure which would allow them to maintain some form of healthcare access without needing to use significant financial incentives to entice specialist physicians into their rural communities
- Utilize public private partnerships to attract broadband or 5G internet providers to offer affordable services in their rural counties. This could make telemedicine more practical as well as help attract businesses as well as teleworkers looking for bargains in housing costs
- Normalize HIV testing and develop systems for utilizing comprehensive prevention programs across states with a focus on affected communities
- Work with small rural hospitals to evolve into healthcare facilities such as urgent care and primary care facilities which are more attuned to the needs of their communities whilst building systems that facilitate quick effective transfer to specialized centers when required.
Whilst all these changes need some commitment and political will by these states; doing nothing is not an option. The state leadership has a decision to make and this may well tell which is more important in them; their people or fiscal issues. In a way this could be an easy choice because when well implemented some of these changes could actually have positive fiscal impact.
By Dr. Leonard Sowah a physician in Baltimore, Maryland
Feature Image: Lakeland Community Hospital in Alabama which was rescued from closure with public funding in 2018.