Archive for Sunday, September 13, 2015

Closure of Kansas hospital highlights rural care challenges

September 13, 2015

— The upcoming closure of the hospital in the southeast Kansas community of Independence has highlighted the problems faced by rural medical providers in states that have refused to expand their Medicaid programs.

"The climate of health care these days is very challenging, and particularly for small rural hospitals like ourselves," said Joanne Smith, spokeswoman for Mercy Hospital in Independence. "We are facing decreased reimbursement; the fact that Kansas did not expand Medicaid has been a significant factor in our reimbursement, and declining population here in our corner of Kansas, as well as a lot of outmigration of patients to other communities for their health care."

According to the National Rural Health Association, at least 55 rural hospitals across the nation have closed since 2010, and 283 more are at risk of closure.

Rural hospitals were already struggling with declining populations, and, in many cases, their financial situations had become critical because of changes in the way hospitals get reimbursed under the Affordable Care Act. The cuts in Medicare and Medicaid reimbursements were designed to be offset by additional revenues from the Medicaid expansion. So when Kansas refused to expand Medicaid, its hospitals were hit especially hard.

The Kansas Hospital Association has repeatedly warned lawmakers that hospitals in the state were struggling because of the state's decision not to expand its Medicaid program.

Mercy stood to lose out on $1.6 million in annual revenue from its hospital in Independence because of the lack of Medicaid expansion. According to Smith, the impact of the state's decision was not the deciding factor in Mercy's closure, but it played a significant role.

"It certainly would have helped," Smith said. "I don't know that it would have been enough to offset all the other losses, but it certainly would have helped in the situation for sure."

The Kansas Hospital Association estimates that beginning in 2016, hospitals in Kansas will lose $131.9 million annually because of reimbursement reductions in Medicare and Medicaid. But the group notes those cuts could be offset with a Medicaid expansion, resulting in a net gain of $230.9 million in additional revenues annually.

But the Kansas governor's office insists the state needs to ensure any expanded Medicaid program is fiscally sustainable in the long term.

"Most of the losses to hospitals, particularly our rural hospitals, are directly related to reductions in federal payments as a result of Obamacare," Eileen Hawley, spokeswoman for the governor's office said in an email. "We will continue to work with the Kansas Hospital Association to find a solution that truly benefits rural Kansans, while not relying on an unsustainable funding stream from the federal government."

For the past 18 months, Mercy and its sister hospital in Fort Scott have undergone what it calls a "discernment process" to find partnerships or other solutions to keep their doors open. An effort to partner its Independence hospital with the Coffeyville Regional Medical Center fell apart last week, leading to the announcement that it would begin the phased closure of its facility beginning Oct. 10.

That announcement stunned Independence, but city leaders say they have not given up hope.

"Unless we can find another party to keep the hospital open, health care will be in bad shape in Independence," City Manager Micky Webb said.

Although there are hospitals available in neighboring communities, city leaders especially worry about the availability of local emergency medical services.

There are local economic impacts as well: Mercy said it employs 190 workers in Independence with annual salaries and benefits totaling $13 million. It has about 50,000 patient visits annually.

Meanwhile, Mercy's hospital in Fort Scott has also talked to other potential partners, but has not yet found a solution, Smith said.

"They have experienced a little bit of an uptick in their business — they've managed to stay somewhat financially viable over the last few months — so for the time being they will remain part of Mercy, but they are still looking for a solution there for that community," Smith said.

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