California’s Rural Hospitals Face Financial ‘Crisis’
Across California, an "overwhelming majority" of rural hospitals "are hemorrhaging dollars, merging with chains, declaring bankruptcy or closing outright," with one in five closing or filing for bankruptcy since 1996. The Los Angeles Times reports that the state's "withering" rural hospital network "threatens to leave" millions of residents protected by "only a minimum of health care service -- or none at all." The Times profiles Southern Inyo Hospital in Lone Pine, a rural hospital located near Death Valley National Park, as just one example of a California facility "struggling to survive." According to hospital officials and experts in rural health care, Southern Inyo and many other rural hospitals in California face an "uphill battle," confronted by obstacles such as declining public and private reimbursements, a "remote" location that "drives up" the cost of health care and a "small, aging population with few options" for insurance coverage. "The state has just not recognized the crucial need that rural communities have for these facilities," Assembly member Virginia Strom-Martin (D-Duncan Mills), who last year sponsored unsuccessful legislation that would have boosted funding to some of the "smallest and most isolated" state hospitals, said. The Times reports that other measures "in the works" -- including receiving a federal Critical Access Hospital designation, a status made available under the Balanced Budget Act of 1997 that grants full Medicare reimbursement for the costs of services provided to qualifying hospitals, and the "advent of telemedicine" -- "might help" Southern Inyo, but "more is needed."
Stephen Lewis, former executive director of the not-for-profit California State Rural Health Association, said, "A major problem is that the health care market is structured and designed around an urban reality that just doesn't match the reality in rural communities, where there may be one provider." In addition, recent Medicare cuts have "hit" rural hospitals "especially hard," Sharon Avery, executive director of the California Healthcare Association's rural health care center, said, adding that the "immediate future looks bleak." According to Avery, California rural hospitals face several difficult "realities," including:
- Six of the state's 71 rural hospitals have closed since 1996;
- Ten rural hospitals are in bankruptcy proceedings, have recently emerged from them or have begun the "initial stages" of filing;
- Almost 75% of the state's rural hospitals have lost money, while the financial situation is "precarious" for the rest (Trounson, Los Angeles Times, 4/2).
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