How the US Healthcare System Starves Rural Hospitals

Healthcare is the central concern in the 2020 elections in all fifty states and US territories. This article reveals more information on states with hospitals which are in danger of closing and one key finding is that most of these states (all voted Republican in 2016) chose not to expand Medicaid with the 2010 Affordable Care Act are worse off.  Of these states only Kentucky, Pennsylvania, and Arizona  have recently implemented the Medicaid expansion under the provisions of the Affordable Care Act. This provision allows low-income persons to obtain healthcare. The rest of these states are limiting federal funding for their rural hospitals even though they are required by federal law to provide care regardless of an individuals ability to pay. Here is a table which shows those states with the greatest number of hospitals likely to close: (The Rural Health Safety Net Under Pressure: Rural Hospital Vulnerability, 2020)

40% likely to close	31-39% likely to close	26-30% likely to close	21-25% likely to close
Texas	Oklahoma	Wyoming	Nebraska
Mississippi	South Carolina	Kansas	Arizona
Missouri	Alabama	Kentucky	Pennsylvania
Florida		North Carolina
		Georgia

Of these states, only Kentucky has expanded Medicaid under the Affordable Care Act. The rest of the Methodology

The Charter Center for Rural Health used regression analysis, which is a type of statistical analysis using multiple variables to assess hospital viability and those criteria included: average age of patient, length of stay, case mix index, Medicare and Medicaid discharges, size of the facility, geographic area, and the age of the facility. In terms of financial measures, operating margins, revenue, occupancy, capital efficiency, and the state level of Medicaid expansion were also evaluated. 

Though a one percent increase in funding can reduce a hospitals chance of closure by three times that investment, this is not occurring. (The Rural Health Safety Net Under Pressure: Rural Hospital Vulnerability, 2020) One of the Charter Center’s regression models showed that states which adopted the Medicaid Expansion under the Affordable Care Act reduced the likelihood of hospital closure by 62% on average. Four hundred and fifty-three hospitals were identified as vulnerable to closure in the US.

When I researched other sources on vulnerability of US hospitals the results were similar and here are the findings from the 2020 Rural Hospital Sustainability Index by Guidehouse. (The Rural Hospital Sustainability Index, 2020)

State	Vulnerable Facilities	Proportion at risk of closure
Tennessee	19 of 28 hospitals	68% of rural hospitals are at risk
Alabama	18 of 30 hospitals	60% of rural hospitals are at risk
Oklahoma	28 of 47 hospitals	50% of rural hospitals are at risk
Arkansas	18 of 34 hospitals	53% of rural hospitals are at risk
Mississippi	25 of 50 hospitals	50% of rural hospitals are at risk
West Virginia	9 of 18 hospitals	50% of rural hospitals are at risk
South Carolina	4 of 9 hospitals	44% of rural hospitals are at risk
Georgia	14 of 34 hospitals	41% of rural hospitals are at risk
Kentucky	18 of 45 hospitals	40% of rural hospitals are at risk
Louisiana	11 of 30 hospitals	37% of rural hospitals are at risk

Larger hospital corporations are driving smaller stand-alone facilities into oblivion. Further, the US healthcare system treats the health of the nation like another product and the healthcare system like a capital enterprise, which as it turns out, doesn’t deliver the most efficacious healthcare. This means we are paying more for treatments that don’t deliver a commensurate improvement in patient health. As a society we should care about this as we would not accept a lesser quality product or outcome from any other consumer good and healthcare certainly is that.

Further, the Medicaid enrollment in rural areas is higher, so states which refuse to help their residents obtain healthcare by expansion of Medicaid under the Affordable Care Act are denying people access to care. Yet, rural people elected the current president who has vowed to gut the Affordable Care Act, an existing program for individuals to obtain medical care and to keep their hospitals afloat through improved cash flows. (Estes, 2020)

The pandemic grants from the federal government are now coming due and I think we can make a good case that rural hospitals should not have to repay the grants, as they are teetering on insolvency. Perhaps this is one issue in which Republicans and Democrats can agree, however, Senate Majority leader, McConnell has scoffed at providing further to assistance municipalities, hospitals, and individuals. The people of this diverse and hardworking nation deserve better.

And this is the healthpolicymaven signing off encouraging you not to sign blanket medical releases when you have medical procedures, do consent for which you agree and that which you decline. This article was written by Roberta E. Winter an independent healthcare analyst and journalist.

References

Estes, C. (2020, October 13). 1 of 4 Rural Hospitals Are At Risk of Closure And The Problem Is Getting Worse. Retrieved from Forbes.com: https://www.forbes.com/sites/claryestes/2020/02/24/1-4-rural-hospitals-are-at-risk-of-closure-and-the-problem-is-getting-worse/#72aa1c861bc0

The Rural Health Safety Net Under Pressure: Rural Hospital Vulnerability. (2020, February 1). Retrieved from Chartis Center for Rural Health: https://www.ivantageindex.com/wp-content/uploads/2020/02/CCRH_Vulnerability-Research_FiNAL-02.14.20.pdf

The Rural Hospital Sustainability Index. (2020, October 13). Retrieved from Guidehouse.com: https://guidehouse.com/-/media/www/site/insights/healthcare/2020/ruralhospitalsustainabilityindex0420_rev01.pdf

Unintended Consequences of Pandemic Hospital Bailouts May Hasten Their Demise

This article was originally posted June 9, 2020 but was accidentally deleted and this is a repost as the article has been cited and comments are posted in various media.

We can thank the Covid pandemic for revealing the fissures in America’s healthcare system, especially how large hospital corporations continue to be focused on earnings over community healthcare. This article examines how the federal pandemic money (CARES Act) for hospitals exacerbated the problem, through distribution to the wealthiest hospital systems and not the struggling rural ones. A similar phenomenon was observed for the farm bailouts when giant agricultural corporations ended up with the money and not the small farmers. The continual winnowing of our nation’s food suppliers and healthcare resources weakens national health. Doling out money without restrictions and lacking a needs-profile for the hospitals resulted in the federal government giving billions based on how much money the hospitals already billed for services. This is like providing a sewage treatment plant to a city that already has one and leaving the neighboring community to treat its own effluent. Further, no other country spends wildly in healthcare, with fewer community health benefits. All funding for healthcare, which is largely paid for by the government through tax subsidies and government financed programs, as well as steep individual contributions in the private sector should be needs-based. We can’t expect the Trump Administration to understand these criteria since it has given billions to the wealthiest while stripping school lunch money from children. This article analyzes the fraying network of urban trauma centers and rural hospitals, with suggestions to abate the hemorrhaging.

Hospitals at Risk

Becker’s Hospital Report found that 20% of US hospitals are at risk of closure as of April 20, 2020. (Ellison, State By State Breakdown of 354 Hospitals At Risk of Closing, 2020) In real terms that means 354 hospitals are potentially unsustainable and 81% of those are considered critical to the community. In my home state, Washington, 18% of rural hospitals are in danger of failure and this isn’t as dire as many states where 50% of theirs could fail. Hospitals provide jobs, help economic development, and offer critical healthcare. Here is a list of the states where the greatest percentage of their hospitals are threatened with closure due to inadequate cash on hand:

1.       Tennessee-68%

2.       Alabama-60%

3.       Oklahoma-60%

4.       Arkansas-53%

5.       Mississippi-50%

6.       West Virginia-50%

7.       South Carolina-44%

8.       Georgia-41%

9.       Kentucky-40%

10.   Louisianna-37%

Hospitals at risk of failure in Washington State (Ellison, 2020)

Columbia County Health System in Dayton is a farming community which serves a county-wide population of 4,058. The nearest hospital is in Walla Walla which is a half-hour drive by car.

Mid-Valley Hospital in Omak (4,806) is a mountainous community in the Okanogan and serves a countywide population of 41,000

Three Rivers Hospital in Brewster is also in the Okanogan region and is in a town of 2,364 people. Seems like Mid-Valley and this one should combine forces.

Grays Harbor Community Hospital in Aberdeen is a fishing and logging community which serves a countywide population of 75,000. The next nearest hospitals would be Olympia or Shelton, both about and hours drive.

Whidbey Health Medical Center in Coupeville, the Whidbey Island County Seat has a population of 1,959 people. Since there is another hospital on the island in Oak Harbor, this wouldn’t be as critical if it succumbs.

To See How Your State Hospitals Fair

Here is the link to the statewide list: https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing

Covid-19 Hospital Bail-out Impact

In this latest government give-a-way most of the money went to the elite health care organizations, including local, Providence Healthcare, which is technically a nonprofit by statute, but makes so much money it has its own venture capital fund (12 billion in cash reserves), generating a billion dollars annually. (Jesse Drucker, 2020) And not to be outdone, lush Cleveland and Mayo Clinics also received millions. My former employer, Ascension Health, which is a Catholic hospital chain, makes so much money it has its own venture capital fund (15.5 billion in cash reserves) and it too received federal bail-out money. This table shows cash reserves and CARES fund distribution: (Liss, 2020)

Hospital Group	Cash in Reserves	Government Bailout
Ascension Health	15,500,000,000	211,000,000
Cleveland Clinic	7,000,000,000	199,000,000
Mayo Clinic	10,600,000,000	150,000,000
Providence Health	12,000,000,000	509,000,000
HCA (for profit)	51,300,000,000	1,000,000,000
Tenet (for profit)	731,000,000	517,000,000

This government largess was despite the fact all of these mega corporations have plenty of cash in reserves, so the government funding was to ensure their profits. Worse yet, the money they were given starves small rural hospitals which may be forced to close. I can’t think of a better example of the American “winner-take-all philosophy, but is this really how we should be running our critical healthcare system? It is impossible to research this and not feel the US government is cannibalizing its own health system.  This demonstrates another systemic failure in US healthcare, which puts profits ahead of patient health. I knew it was time to leave healthcare when the hospitals preferred hiring people without a healthcare background, the easier it is to put patients out of the equation if you think of them as widgets.

This article was written by Roberta Winter, an independent journalist and health policy analyst, who has published under the healthpolicymaven trademark since 2007. Please feel free to share this article virally.

References

Ellison, A. (2020, March 6). Five Hospitals Face Imminent Closure As Covid-19 Wreaks Havoc. Beckers Hospital Review. Retrieved June 8, 2020, from https://www.beckershospitalreview.com/finance/5-washington-hospitals-face-imminent-closure-as-covid-19-wreaks-havoc.html

Ellison, A. (2020, April 9). State By State Breakdown of 354 Hospitals At Risk of Closing. Becker Hospital Report. Retrieved June 8, 2020, from https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-354-rural-hospitals-at-high-risk-of-closing.html

Jesse Drucker, J. S.-G. (2020, May 25). Wealthiest Hospitals Get Billions in Bailbouts for Struggling Providers. The New York Times. Retrieved June 8, 2020, from https://www.nytimes.com/2020/05/25/business/coronavirus-hospitals-bailout.html

Liss, S. (2020, May 26). Here's How Much For Profit Hospitals Have Received In Bailout Money So Far. Healthcare Dive.com. Retrieved June 8, 2020, from https://www.healthcaredive.com/news/heres-how-much-for-profit-hospitals-have-received-in-covid-19-bailout-fund/578378/

 

Nationwide Data on Hospital Price and Comparability-Are You Getting Ripped Off By Your Hospital?

 

Hospital Price and Comparability-What Private Employers Pay VS Medicare

One of the crucial elements for making informed decisions on any product is understanding price and comparability for services and this is also true for healthcare. The recent Rand Report (Christopher M. Whaley, 2020) illuminated huge pricing disparities for hospitals across the country by evaluating what private employers pay versus government reimbursements. The State of Maryland has state-controlled hospital prices (and some of the lowest hospital costs in the nation) and is therefore not included in the survey. I previously published an article on how Maryland’s state hospital pricing works. (Winter R. , 2014) The Rand Report analyzed 3000 hospitals in 49 states to assess relative value for similar services paid by private employer plans versus Medicare, which is the largest government funded plan in the US. Quality rankings were based on findings from the Centers for Medicare and Medicaid Hospital-Compare data, Leapfrog Hospital Survey, and HRIS patient mix data then scaled on a 1-5, with 1 being the lowest ranking.

Using data from 2016 to 2018 for private employers, the Centers for Medicare and Medicaid (CMS), and state agency data on hospital claims, here are the key findings from the report: (Christopher M. Whaley, 2020)

ü     Rand found little relationship between hospital quality rankings and price disparity. In other words, hospitals that charge less can also deliver high quality results and these are referred to as high value hospitals. Conversely hospitals that charge more don’t necessarily have better quality.

ü      There is a huge variance in hospital prices by state, with Arkansas, Michigan, and Rhode Island boasting relative value prices within 200% of Medicare reimbursement levels. Meanwhile, Florida, West Virginia, and South Carolina had relative value prices nearly 350% of Medicare reimbursement levels. So private employer plans in the latter could be paying 150% more for the same services compared to those in AK, MI, or RI.

Using the recently published Rand Report of hospital pricing for private payments versus government funded CMS payments, I extracted the zip file and analyzed data for the combined cost for inpatient and outpatient services by state, health system, and individual hospital. Here are the results for the most expensive and least expensive hospitals both in Washington and nationwide.

Washington

These tables show the relationship between the combined price for inpatient and outpatient services charged to private insurers (and self-insured plans), versus what the Centers for Medicare and Medicaid paid. Yakima Valley Memorial Hospital is one of the best deals in the state with a combined price for inpatient and outpatient services of 170% for private insurance compared to what Medicare/Medicare (CMS) pays.

Least Expensive Hospitals

Facility Name	Location	Quality Ranking 5 is highest	Health System	Combined Price vs CMS
Yakima Valley Memorial Hospital	Yakima	4	Virginia Mason Health System	170% of CMS
Swedish Hospital Issaquah	Issaquah	4	Providence St. Joseph	176% of CMS
Evergreen Hospital	Kirkland	5	Peace Health	189% of CMS
UW Medicine-Northwest Hospital	Seattle	4	UW Medicine	207% of CMS
Overlake Hospital	Bellevue	4	Peace Health	215% of CMS

Most Expensive Hospitals

The most expensive hospital in the state is Tacoma General Hospital-Allenmore, part of the Multicare  System charging 330% of the CMS rate of reimbursement for privately insured plans. Though Harborview Medical Center scored a 312% combined price vs CMS, since it is a critical access hospital and trauma center for multiple states and therefor has more intensive patient needs, I have removed it from the list.

Facility Name	Location	Quality Ranking 5 is highest	Health System	Combined Price vs CMS Reimbursement
Tacoma General-Allenmore	Tacoma	2	Multicare	334% of CMS
Good Samaritan Puyallup	Puyallup	2	Multicare	330% of CMS
Swedish Providence	Seattle	5	Providence St. Joseph	307% of CMS
Harrison Medical Center	Bremerton	3	Catholic Health Initiatives	304% of CMS
St. Joseph Medical Center-Bellingham	Bellingham	4	Peace Health	303% of CMS

 Nationwide Data

10 Best Value Hospitals Rand Report 2020

Here are the 10 least expensive hospitals in the country, based on the relationship of what they charge private employers and what they are paid by CMS for similar services. Kudos to Maine for boasting multiple hospitals on this list of low price and high-quality rankings. This trend was also proven true when I ranked nationwide hospitals in 2011 and found only 1 hospital in the country had a perfect safety score, Penobscot Bay Medical Center in Maine. (Winter R. E., 2012) Of these highly affordable hospitals 90% are nonprofits and 40% are independent community based hospitals.

Facility Name	City	Quality Ranking 5 is highest	Health System	Combined Price vs CMS
Texas Women’s Hospital	Houston, TX	3	HCA Healthcare	48% of CMS
Redington Fairview Hospital	Skowhegan, ME	4	Independent	61% of CMS
Good Samaritan Hospital	Bakersfield, CA	2	Independent	62% of CMS
Women’s Hospital	Baton Rouge, LA	3	Independent	67% of CMS
Sebasticook Valley Hospital	Pittsfield, ME	4	Eastern Maine Healthcare Systems	71% of CMS
Deaconess Women’s Hospital	Newburgh, IN	5	Deaconess Health Systems	75% of CMS
Patients Hospital of Redding	Redding, CA	NA	Adventist Health	80% of CMS
Blue Hill Memorial Hospital	Blue Hill, ME	4	Eastern Maine Health Systems	82% of CMS
Physicians Medical Center	New Albany, IN	5	Independent	83% of CMS
Mount Desert Island Hospital	Bar Harbor, ME	4	Eastern Maine Healthcare Systems	89% of CMS

 10 Worst Value Hospitals Rand Report 2020

Of the most expensive hospitals with the greatest disparity in price charged to private employers versus the CMS reimbursement 70% were for profit companies, with 50% of those run by the behemoth HCA Health. HCA is the company that received the largest fine for healthcare fraud (at the time) for up-charging CMS and bilking government tax payers for billions. (Justice Department-US Government, 2003) Rick Scott, former Governor of Florida and now Senator of Florida was running HCA at that time. (Schultz, 2018) 

Most interesting is Face Book founder and guy-still-trying-to-make-friends, Mark Zuckerberg’s hospital in San Francisco, had the worst quality ranking in the Rand 2020 survey and still managed to charge private employers nearly six times the CMS reimbursement for the same services. These hospital price disparities place a great strain on employers in California, especially with the pressures of the Covid-19 pandemic. It is no wonder that California is exploring establishing its own state-run healthcare plan.

Facility Name	City	Quality Ranking  5 is highest	Health System	Combined Price vs CMS
North Bay Regional Hospital	Fairfield, CA	2	North Bay Healthcare Group	815% of CMS
Fort Walton Beach Medical Center	Fort Walton Beach, FL	2	HCA Healthcare	575% of CMS
Memorial Hospital Modesto	Modesto, CA	2	Sutter Health	572% of CMS
Zuckerberg Memorial Hospital	San Francisco, CA	1	San Francisco Health Network	565% of CMS
Westside Regional Medical Center	Plantation, FL	1	HCA Healthcare	514% of CMS
Colorado Plains Medical Center	Fort Morgan, CO	2	LifePoint Health	508% of CMS
Parkridge Medical Center	Chattanooga, TN	2	HCA Healthcare	505% of CMS
Springs Memorial Hospital	Lancaster, SC	2	Community Health Systems	499% of CMS
Summit Medical Center	Hermitage, TN	2	HCA Healthcare	493% of CMS
Alaska Regional Hospital	Anchorage, AK	5	HCA Healthcare	493% of CMS

 Conclusion

It is obvious that small independent hospitals frequently offer better value with good hospital quality rankings, which reflects on hospital leadership and the fact they are focused exclusively on delivering healthcare to their communities as opposed to creating giant venture capital funds. I personally suggest we have someone from Maine lead US healthcare reform for they have surely figured that out in their home state.

And this is the healthpolicymaven signing off encouraging you not to sign blanket waivers when submitting to healthcare procedures, do indicate that for which you agree and also what you choose to decline.  Healthpolicymaven is a trademark of Roberta E. Winter, in continuous use since 2007. All opinions expressed in this column are independent journalism without industry sponsorship from the healthcare sector.

 References

Christopher M. Whaley, B. B. (2020). Nationwide Evaluation of Health Care Prices Paid by Private Health Plans-Findings From Round 3 of Employer-led Transparency Initiative. Rand Corporation, Santa Monica. doi: https://doi.org/10.7249/RR4394

Justice Department-US Government. (2003, June 26). Largest Healthcare Fraud Case In US History Settled-HCA Investigation Nets 1.7 Billion. US Government Department of Justice. Retrieved September 18, 2020, from ustice.gov/archive/opa/pr/2003/June/03_civ_386.htm#:~:text=(formerly%20known%20as%20Columbia%2FHCA,the%20Justice%20Department%20announced%20today.

Schultz, R. (2018, October 2). Gov. Rick Scott Took Responsibility-No He Took 300 Million. Retrieved September 18, 2020, from https://www.sun-sentinel.com/opinion/fl-op-col-rick-scott-medicare-fraud-20181002-story.html

Winter, R. (2014, May 20). State Laws Which Inform the Consumer of Price and Quality. Retrieved September 18, 2020, from https://healthpolicymaven.blogspot.com/2014/05/state-laws-which-inform-consumer-of.html

Winter, R. E. (2012). Unraveling US Healthcare-A Personal Guide. Rowman & Littlefield. Retrieved from https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972