Rural-area hospitals threatened by corporate priorities

Bill Knight column for Thursday, Friday or Saturday, July, 21, 22 or 23

When the 94-bed St. Mary’s hospital in Streator, Ill., shut down in January, it was devastating to residents of Livingston and LaSalle Counties, but as a medical center serving a predominantly rural population, it may have been an example of two troubling trends.

First, 72 rural hospitals closed between January 2010 and April 2016, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina. (The number of such hospital closures has increased each year since the Great Recession of 2008-09.) More shocking, perhaps, is that corporations’ business plans, not local needs, are driving many hospital closures, according to a new report looking why communities lost their hospitals and what happened afterward.

“A Look at Rural Hospital Closures and Implications for Access to Care: Three Case Studies,” from the Kaiser Family Foundation, reports, “The number of rural hospital closures has increased significantly in recent years. This trend is expected to continue, raising questions about the impact the closures will have on rural communities’ access to health care services.”

The report also finds that large, corporate hospital operators have closed rural health-care facilities based on their business interests, with little consideration of community needs or public input.

The study focuses on three communities that last year lost hospitals – hospitals that served rural areas: Mercy Hospital in Independence, Kan.; Parkway Regional Hospital in Fulton, Ky.; and Marlboro Park Hospital in Bennettsville, S.C.

“The large health systems that owned and managed the hospitals [that closed] made the decision to close … based not on community needs but on corporate business considerations that favored other hospitals in their system over the ones they closed,” says the report, written by Urban Institute senior research associate Jane Wishner, plus Patricia Solleveld, Robin Rudowitz, Julia Paradise and Larisa Antonisse. “Typically, there was little or no local process of consultations or public input.”

Using interviews with stakeholders and public records, researchers heard that corporations owning medical centers in Fulton and Bennettsville spent money on improvements for nearby hospitals that they also owned instead of investing in local hospitals.

In Kentucky, local leaders tried to work with for-profit owner Community Health Systems to find other providers to continue services at the hospital, the report says, “but CHS rejected this offer, likely, to preempt competition for patients in the county.”

CHS also restricted the use of the hospital, Kaiser says, noting, “It permitted no acute-care facility to operate there – an action that one respondent said ‘strangled’ the community’s access to local health-care services.”

In Independence, the Mercy Health system, a nonprofit, spent funds to repair its hospital 75 miles away in Joplin, Mo., damaged by a tornado. While rebuilding that facility, the company “ ‘lost its focus’ on the smaller Mercy Hospital in Independence,” the report says.

Hospital owners shifted their focus away from serving their rural communities and showed a “lack of consideration or planning for the impact on the community.”

Other factors influenced such unpopular decisions, the report says, including social and economic issues such as poverty rates, lack of insurance, and frequent use of Medicare or Medicaid programs. Also, patients using private insurance – which can reimburse hospitals more – started using other facilities, “weakening the hospital’s payer mix and also reinforcing local perceptions that the local hospital was of low or poor quality.” Plus, each of the three hospitals studied was near larger hospitals, which increased competition for patients and payers, and rural hospitals have been slow to change to a shift in medical priorities. (One South Carolina stakeholder said, “We used to pay hospitals to keep patients in; now we pay to keep them out.”)

Others blamed local leadership.

“Local residents and public officials often lack the expertise or experience needed to negotiate with large corporate health systems and have limited understanding of the transformations taking place in health care delivery or payment systems widely,” the report says.

This is a major problem since about half of the country’s 5,000 short-term, acute-care hospitals are in rural areas, and closing that kind of hospital hurts rural communities in key ways, the report says: reducing access to emergency care, losing physicians and other health-care providers, requiring patients to travel farther for care or do without, losing jobs, and making it difficult to attract employers.

Communities with substantial rural residents should anticipate such pressures, and must plan to fight corporate business models that sacrifice patient care for profits.

[PICTURED: Graphic from Kaiser Health News.]