COVID-19 is pushing struggling rural hospitals to the brink

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Hospitals in rural communities throughout the U.S. have lengthy confronted monetary woes, with dozens of cash-strapped services closing over the previous decade. But COVID-19 is threatening to shut many extra small hospitals in much less populated areas, threatening the high quality of take care of hundreds of thousands of Americans. 

A current report by the U.S. Government Accountability Office concluded that greater than 1 / 4 of rural hospitals confronted vital monetary misery even earlier than the pandemic, forcing them to probably pull again on providing well being care providers and even to shut down. Executives at rural hospitals which have managed to stayed afloat since the coronavirus struck credit score their survival to federal assist and different monetary help that has enabled them to proceed working. 

“Rural hospitals started from a place of less liquidity, so for them the experience has been more pronounced,” mentioned Mark Holmes, director of the University of North Carolina’s Cecil G. Sheps Center for Health Services Research.

Since 2010, 135 rural hospitals have closed in states together with Georgia, North Carolina, Texas and West Virginia, in accordance to the Sheps Center. Nineteen services closed in early 2020, suggesting extra would meet the similar destiny as the pandemic widened, however authorities assist has helped buoy services working in the pink.

“Leaking lifeboat”

“Now we are in a leaking lifeboat situation. As that emergency funding dries up and things go back to normal, the hospitals took a big hit,” Holmes mentioned. 

Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, is additionally involved that the infusion of presidency funding may obscure the dire monetary image many hospitals face.

“Many hospitals may look better financially this year because they got federal assistance — they may not close. But we have to be careful about thinking that if a hospital made it through the pandemic and didn’t close, they must be healthy,” he mentioned. 

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While some services had been pushed beneath by the pandemic, others merely “got that day of reckoning pushed back,” Miller added. 

Ozarks Community Hospital in Gravette, Arkansas, was already “cannibalizing assets and resources in order to survive” lengthy earlier than the public well being disaster, CEO Paul Taylor instructed CBS MoneyWatch. But the scenario worsened after the pandemic when the facility had to rein in providers, slashing its income. In April, the hospital suspended elective surgical procedures and different income-generating procedures over coronavirus-related security issues.

“We had to close down a number of services, including surgery, which was our chief revenue center,” Taylor mentioned. 

“Even though we are in the health care business in the middle of a pandemic, it meant patients were not undergoing any kind of procedures or receiving health care that they could avoid,” he added. 

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Ozark Community Hospital in Gravette, Arkansas, one in every of the few surviving well being care services in the space, is leaning on federal help amid a downturn in procedures throughout the coronavirus pandemic. 

Courtesy of Ozarks Community Hospital

Ozark’s income dropped by 50% whereas its prices, most of them associated to containing COVID-19, rose sharply. The hospital was compelled to dip into its money reserves to purchase personal protecting tools and manufacture testing kits for its workers and sufferers. It additionally confronted surging prices after doubling its mattress capability, forcing the facility to workers up. 

“Revenue is down, expenses are up and we have no resources. We have no excess capacity to handle what’s been thrown at us,” Taylor mentioned. 

Ozark obtained some assist thanks to roughly $10 million in authorities funding from completely different sources, together with a Paycheck Protection mortgage for small companies; Coronavirus Aid, Relief and Economic Security (CARES) Act funds earmarked for hospitals; and advance funds from Medicare to assist offset income losses. 

Taylor suspects “hundreds” of rural hospitals would have closed had it not been for federal help. “These three sources of funds made available generally were lifelines for rural health care providers,” he mentioned.

Yet Ozarks Community is in no way in the clear. Come April, it’ll have to repay Medicare 1 / 4 of the advance fee the hospital acquired. 

Right now, Taylor does not have the funds. As the pandemic rages on, the hospital’s prices stay excessive whereas many sufferers delay remedy.

“Our revenues continue to be suppressed, our expenses continue to run higher and it’s been a long, cold winter. It’s also been a long time since we had any of those CARES Act funds. We already used it all up,” Taylor mentioned. 

Closing is not an possibility

Taylor is relying on getting a authorities mortgage that will enable him to repay the Medicare fee that is coming due. If he cannot, it might be recreation over. “If we have to pay those funds back and we can’t close this loan, we won’t be able to do it. We will be out of business,” he mentioned. 

Titus Regional Medical Center, situated in the northeast nook of Texas, finds itself in an identical predicament. It acquired about $8 million in funding by means of the CARES Act, however nonetheless cannot break even. At its peak, greater than half of its 50 sufferers had been sick with COVID-19, and remedy was pricey. 

The facility’s best price was staffing, adopted by the administration of high-priced therapies for COVID-19 — together with Remdesivir, which prices hundreds of {dollars} per dose — and convalescent plasma remedy.

It’s going to be robust for the hospital to get out of the pink as a result of it is halted elective procedures for roughly a year now. “The volumes aren’t going to come back to where they were, and we still have quite a few expenses,” CEO Terry Scoggin instructed CBS MoneyWatch. 

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Still, closing is not an possibility, in accordance to Scoggin. Four close by hospitals have closed over the previous six years, leaving Titus Regional to serve numerous native communities.  

“We do 1,000 births a year. We have a lot of babies. Since we’re right in the middle of everybody, we serve a critical role,” Scoggin mentioned. “We’re in it for the long haul because we have to be.”

Rural hospitals additionally will be financial engines for communities — when one closes, different well being care suppliers have a tendency to pack up and depart, too. The GAO discovered a 16% lower in the variety of physicians who remained in a given space after a rural hospital closed. When a rural hospital closes, native residents additionally usually should journey a minimum of 20 miles farther to entry the subsequent closest facility. 

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