Policy: Health Care

Rural hospitals align with larger ones to survive

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News,Business,Health Care

JACKSON, Miss. (AP) — Rural hospitals are facing a financial crisis that threatens many Mississippians' access to doctors, said Dr. Luke Lampton, chairman of the state Board of Health.

With increased government costs and drastic cuts in Medicare, "a lot of the rural hospitals aren't going to survive," he said. "Most have low censuses, with poor, elderly and vulnerable patients and are barely making money."

With Mississippi opting out of the Medicaid expansion allowed by the Affordable Care Act, hospitals are getting none of the money that would have come with it. Overall, the state would have brought in an additional $2.1 billion, netting the state $431 million, according to a study by The Commonwealth Fund.

Instead, Lampton said, hospitals are still having to pay the additional costs of the new regulations, which some have estimated as high as billions nationally.

He said many rural hospitals in Mississippi are hurting, with some slashing operational costs and laying off employees. Southwest Mississippi Regional Medical Center of McComb recently announced hundreds of layoffs.

Asked to assess his hospital's future, Emmett C. Hennessey, CEO of Beacham Memorial Hospital in Magnolia, replied with one word: "Bleak."

A decade or so ago, all Mississippi hospitals were "making good money," he said.

Government reimbursements to make Medicaid payments equal Medicare payments totaled hundreds of thousands of dollars then, he said.

Now, "the government is giving us federal funds we're entitled to, but they're charging us a tax on it," he said. "We were $30,000 in the hole on that one transaction."

Then there's the matter of "unfunded mandates," he said.

"We have three RNs and an LPN that are doing the reporting the federal government requires. They have nothing to do with patient care."

Rural hospitals have also been hurt by cuts in reimbursements, totaling $170 billion in recent years, according to the American Hospital Association.

Nationally, hospitals have an $8 billion shortfall from Medicaid reimbursements, a $24 billion shortfall from Medicare reimbursements and a $41 billion shortfall from uncompensated care, according to the association.

Hennessey said Medicare reimbursement rates are so terrible now "the Mayo Clinic is not taking Medicare anymore — the Mayo Clinic."

In 2010, Mayo stopped accepting Medicare patients at one of its primary care clinics in Arizona as part of a two-year pilot program to determine if it should also drop Medicare patients at other facilities in Arizona, Florida and Minnesota. It cited an $840 million loss in 2009 from treating Medicare patients because of the program's low reimbursement rates.

Today, the Mayo Clinic provides medical services to Medicare patients but doesn't accept the Medicare-approved payment amount as full payment, making the Medicare patient financially responsible for the portion above the Medicare allowable amount, according to its website.

Hospitals get 89 cents for every $1 spent on Medicaid and 86 cents for every $1 spent on Medicare, according to the American Hospital Association.

To make it worse, Hennessey said, medical care is being run, not by the doctors, but by the bureaucrats.

They decide how much, or even if, a patient's care will be covered, making it almost impossible to get approval for emergency surgery, he said. "If they say no, I eat it."

Mendal Kemp, program director for the Mississippi Hospital Association's Center for Rural Health, said some rural hospitals are aligning with bigger hospitals to survive.

Thirty-two rural hospitals in Mississippi have signed up as critical access hospitals, which promises them cost, plus 1 percent, payments from the federal government.

But Kemp said cuts to that funding could come if another government sequestration takes place.

The hospital association, he said, is pushing lawmakers to "ease the burden on hospitals so that the staff can spend more time and money caring for patients."

Dr. Aaron Shirley, chairman of the Jackson Medical Mall, said if he had his wish, "we would take politics out of it and get it down to need and being a Christian."

"We like to put 'In God We Trust' on signs. It would be nice if we carried that Christian doctrine throughout what we do every day."

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Information from: The Clarion-Ledger, http://www.clarionledger.com

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