Interview with Alan Morgan, National Rural Hospital Association – Part One
There’s no question that the continuing discussions surrounding the Bath County Hospital are an indication of how much the community recognizes what a valuable asset it possesses, and how important it is to retain it. Today’s economic and health care climate often make it difficult for independent hospitals to survive.
To better understand the economic issues that health care institutions can face, we spoke with Alan Morgan, Chief Executive Officer of the National Rural Health Association. The NRHA is a non-profit membership organization dedicated to improving health and healthcare in rural communities. Mr. Morgan did not address the Bath County Hospital specifically, but rather the overall picture.
“It is a tough time for our nation’s rural hospitals out there, for a variety of reasons. We’re in the middle of a rural hospital crisis. Since 2010, 57 rural hospitals have closed across the U.S. That’s a significant number of rural communities who have lost their point of access when it comes to delivering care within the community. Our organization is projecting as many as 283 rural hospitals across the U.S. Have the potential to close within the near future, looking at their financials, and where they’re at right now. We’re at the front end of a rural hospital closure crisis that we expect to continue, and to actually get worse, unless we do something to intervene, both at the local and state level, and hopefully at the Federal level as well.
“Rural hospitals are facing a perfect storm of problems that are hitting them at the same time. Number one, over the past five years, at the Federal level, Congress has made a series of reductions to rural Medicare payments to this rural facilities – small changes in Medicare payment policy, that over the course of time have added up. Number two, the Affordable Care Act, in it expected Medicaid to expand, which in many states, it has not, so that’s putting pressure on these rural facilities. The Affordable Care Act actually paid for part of this Medicaid expansion by reducing what they called disproportionate share payments to these rural facilities as well. So, let me restate – the disproportionate share payments came down, expecting Medicaid payments to go up – neither happened, so that’s a double whammy when it comes to hitting the bottom line in these rural facilities.
“And then the thirds jot component is just the changing nature of our healthcare system that we’re facing right now. Overall it’s changing – more systems are consolidating, there’s more requirements for interoperability when it comes to technology, medical records – all these things are really making it a tough financial situation for these small rural hospitals to keep their doors open.”
Mr. Morgan spoke about the reluctance of some states to expand Medicaid.
“There are many policy reasons by which the states are not expanding Medicaid. The major one that we’re hearing is the concern that it’s a substantial additional cost to the state level, which right now will be offset by Federal contribution. States are concerned that they will proceed with expanding Medicaid, and then down the road, the Federal government will begin to cut back their contributions to Medicaid payments, leaving the states with holding the bag for this significant increase in cost. Again, the Federal government, before the Affordable Care Act, provided substantial contributions through what was known as a disproportionate share payment. They decreased those, expect ion to go in with the states on this Medicaid expansion. That hasn’t happened, and as a result of that, you have the hospitals now having to figure out “how do we deliver care to those who can’t afford it, but yet as hospitals, we have to treat.”