RURAL HEALTH CARE: Hospitals in West Ailing, Communities to Follow?
Rural hospitals in California and the West are baring the brunt of the financial crisis facing many health care facilities. Many of these institutions serve as the "economic linchpin" for their communities: if they falter, so do the towns they serve, the San Jose Mercury News reports. While there are many causes for the financial woes of rural hospitals, many believe that the evolution of the market-driven, for-profit health care system is to blame. For-profit HMOs, which dominate urban areas, have not penetrated the rural markets, largely due to the lack of financial viability associated with those areas. Dr. Tom Nesbitt, director of the telemedicine program at the University of California-Davis, said, "HMOs need the young employed, a well population to support the sick. Rural areas don't have that population. The gravy isn't there, so the HMOs aren't there." According to the California Healthcare Association, 60% of the 72 rural hospitals in the state lost money in 1997; five have closed over the last three years; five have declared bankruptcy; and three are planning to declare bankruptcy soon. California is not alone in the rural health care crisis. In Washington last year, 17 of the state's 40 rural hospitals were "on the verge of closing their doors," six were in serious financial jeopardy and only 17 reported financial stability. Half of the 60 rural hospitals in Montana were in the red last year, while the other half "barely broke even." Attracting qualified staff is such a problem in Wyoming that the federal government has designated 80% of the state as a "medically underserved area."
Blame the BBA
In addition to the logistical hurdles, many rural hospitals argue that cuts stemming from the 1997 Balanced Budget Act are "pushing many rural hospitals to the edge." The cutbacks, designed to eliminate $115 billion from the Medicare budget, have devastated rural health care facilities, a majority of whose patients are Medicare or Medicaid beneficiaries. In California, 40% of rural hospital patients are on Medicare while an additional 20% are on Medi-Cal. Rural communities are often home to a large number of the working poor, who depend on Medicaid for health coverage. In addition, CHA reports that the state's 18 rural counties have a larger percentage of elderly residents compared to other counties. Despite the higher percentage of Medicare beneficiaries treated by rural health care facilities, these providers have little input into national health care policy. "The political will is just not there to tackle these issues because the numbers (voters) are not there," George Koortbojian, interim administrator of the Southern Humboldt Community Hospital in Garberville, said. He added, "We end up leaving decisions to others in faraway places, and when that happens, you don't get good decisions." The BBA also changed the Medi-Cal reimbursement structure to a flat rate, compared to the cost-per-visit used prior to 1997.
Who Can Help?
As the health care crisis grows in rural communities, some are trying to find ways to stop the hemorrhaging. While many rural hospitals lack the technology and personnel to wade through the ever-changing cryptic billing for Medicare, Sen. Dianne Feinstein (D) is sponsoring the Safety Net Preservation Act, which would "exempt rural clinics from some of the more complex Medicare billing regulations and establish a more attractive rate structure for rural clinics that treat Medicare and Medicaid patients." In addition, HCFA has come up with a number of solutions -- most significant, the Critical Access program. In order to qualify for federal funds, a critical access hospital must be a not-for-profit or public facility that provides around-the-clock emergency care, has less than 15 beds, offers a maximum stay of no more than four days and is located at least 35 miles away from another hospital. But rural hospital officials "hate the program," as it turns them into "glorified emergency rooms." Donna Donald, administrator of Lone Pine's Southern Inyo District Hospital, said, "We take care of a lot of people in our acute care hospital. And we have 33 patients in our long term nursing facility. If we're not here, they'd have to go far away from their families." HCFA officials have tried to entice HMOs into some rural markets, a feat that has proven to be an uphill battle. Joe Tilghman, acting regional administrator in the HCFA's San Francisco office, said, "We've been looking all over to try to find ways to incentivize managed care to get into rural areas. It's difficult. You can do it (create incentives) in urban areas because of competition between provider groups. In the country, there is no competition" (Hubner, 10/31).