When Pickens County Medical Center in Carrollton, Alabama, announced Feb. 28 it would close by week’s end, the impact was not confined to the west Alabama community. It was a grim reminder of the fight for survival for rural hospitals across the country, where 120 hospitals have closed in the past 10 years.
PCMC is the seventh rural hospital to close in Alabama over that period. Four rural hospitals have closed in Mississippi since 2014, but according to a 2019 study by Navigant Health Care, 31 of Mississippi’s 100 acute-care hospitals are rated “at risk,” including North Mississippi Medical Center West Point.
Richard Roberson, general council and vice president for policy and state advocacy for the Mississippi Hospital Association, said Navigant’s list might not be an entirely accurate assessment.
“Based on some of the metrics Navigant used in their study, some of those 31 hospitals probably shouldn’t be classified as at risk,” Roberson said. “But many, probably most, are. Even those rural hospitals who aren’t on the list face real struggles. Probably all 31 are close to fitting the ‘at risk’ criteria. The margins for all of our rural hospitals are incredibly small.”
At Noxubee County Medical Center in Macon, hospital administrator Danny McKay and CFO Meg Ebert took the news from Pickens County with no small amount of empathy.
“It’s hard to imagine what that would be like,” McKay said. “But I do understand how it can happen.”
“Our margins are very small,” Ebert said. “We run a pretty tight ship, financially. We have to do that. Our finances are looking pretty good. We’re grateful for that. But we recognize it’s a challenge that isn’t going away.”
Pickens County impact
The closure of the 56-bed PCMC means the county is without a hospital, leaving residents to look elsewhere for hospital care.
Baptist Memorial Hospital-Golden Triangle in Columbus is 34 miles from Carrollton and is now the closest hospital.
Megan Pratt, director of marketing at Baptist, expects to see more patients from Pickens County now that the hospital there has closed.
“We already serve patients from Pickens County and West Alabama,” Pratt said. “At this time, we haven’t had any inpatient transfers yet, but that’s possible.”
The implications of the hospital closure go beyond health care. It also means the loss of 150 jobs, a big blow for a county with a workforce of 8,036. The loss of those jobs raises the unemployment rate in the county by 1.8 percent to 4.5 percent.
“In most of the counties, the hospital is among the largest employers in the county and they are good-paying jobs with high-skill workers,” Roberson said. “When you take those jobs away, you have money out of the tax base. It exacerbates any economic problems they already have. It also really hurts economic development in rural areas that already struggle to recruit new businesses. When companies look at areas to locate in, the first things they look at are schools and health care. So when a rural community loses its hospital, it’s an almost crippling blow.”
Solutions
Roberson said while there is no single solution that would lift all rural hospitals out of at-risk status, there is one option MHA believes would make an enormous impact — Medicaid expansion.
He said it’s no coincidence the highest rates of rural hospital closures are located in the 15 states that have not expanded Medicaid coverage under the Affordable Care Act, which passed in 2010.
For states like Mississippi, failing to expand Medicaid hurts hospitals in two ways.
“Under the Affordable Care Act, the federal government cut payments to Medicare,” Roberson said. “They did that in order to free up money for the expanded Medicaid program. In states that expanded Medicaid, the money coming into the program through expansion offsets the loss in Medicare payments. But in Mississippi, where we haven’t expanded Medicaid, hospitals still have to deal with the cuts in Medicare payments without the benefit of those federal Medicaid dollars. When you already have margins so low, that’s a real challenge.”
Under the AFA, the federal government provides 90 percent of the cost for states that expand Medicaid. In Mississippi, state leadership has said it cannot cover the additional 10-percent cost for bringing approximately 300,000 Mississippians into the program.
More recently, their objections have been based on fears that the state could be left holding the bag on the entire cost of the expansion should the AFA be abolished, something Republicans in Congress and the U.S. Senate have circled as a bulls-eye since the AFA was signed into law.
“You’re talking about putting another 300,000 people on Medicaid,” State Rep. Gary Chism (R-Lowndes County) said before the session began. “We already have 600,000 on Medicaid as it is. Philosophically, I just don’t see how we can do that. What is that eventually going to cost and what happens if (AFA) goes away? It’s hard to take back something after you’ve given it.”
Roberson pointed out that Mississippi has a provision allowing the state to opt out of federal programs.
“It’s been that way for 50 years,” he said. “That hasn’t changed.”
In 2019, MHA announced its own plan for expanding Medicaid coverage, one that would shift the state’s 10-percent cost to patients and providers.
“We wanted a plan where everybody has some skin in the game,” Roberson said.
But that plan has been stonewalled by Mississippi Speaker of the House Phillip Gunn, who called Medicaid Expansion bills “dead on arrival” when the Legislature opened session in January.
Roberson continues to lobby the Legislature to expand Medicaid, including a new option he says those philosophically and politically opposed to Medicaid expansion might can stomach.
“The argument (against expansion) has been that we have to be fiscally conservative,” Roberson said. “But there is a proposal from the Trump administration to provide block grants to those states that haven’t expanded to cover their share of the costs. The truth is, you can’t be fiscally conservative and not expand Medicaid. As it is now, our hospitals are absorbing the costs, but getting none of the benefits. It’s not sustainable.”
Survival
Gilmore Memorial Hospital in Amory appeared poised to be the fifth rural hospital to close in Mississippi in 2018. It survived, however, through its sale to North Mississippi Medical Center, which purchased the hospital in January 2019.
“Some hospitals have managed to survive by selling to other, bigger hospital groups,” Roberson said. “Hospital sales and affiliations to larger groups have been effective in some cases because of the economy of scale that applies and some other efficiencies there are. But that’s not a broad-scale solution. What might work in some situations doesn’t work in others.”
McKay said Noxubee County Medical Center has survived by diversifying and adjusting what it offers to meet current needs, not those of the past.
Noxubee County has 31 fewer beds that Pickens County, but has expanded in other areas.
“The hospital in and of itself isn’t going to make money,” McKay said. “Your best prayer is to get 1 percent above costs and that’s if you collect every dollar that’s supposed to come in, which never happens, of course.
“That’s the reason we have our nursing home (60 beds), two family health clinics and our new retail pharmacy,” he added. “We are constantly looking for new revenue streams. Along with having a great team, being able to provide new services is what’s kept us sound.”
McKay said while his hospital is on sound footing, the challenges he faces remain substantial.
Charity care for uninsured patients makes up a sizable portion of the hospital’s medical work, but McKay said one of the biggest frustrations his hospital faces is the almost constant changes in reimbursements from both private insurances as well as Medicare and Medicaid.
“In order to reduce costs, you either have to reduce benefits or reduce what is paid to the provider,” McKay said. “Sometimes, we’ll provide care for a patient and then learn after the fact that treatment doesn’t meet the criteria now. It’s frustrating. The charity patients, those without insurance, you treat knowing you’re not going to be paid back for. That’s part of your moral responsibility. It’s those costs that you think you’re going to recoup and then don’t that are the ones that bother us.
“The fact is, we live in recognition that health care is breaking the country,” he added. “Something has to be done.”
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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