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Rural hospitals struggle to stay open in states declining Medicaid expansion

A total of 50 hospitals in the rural U.S. have closed since 2010, and the pace has been accelerating, with more closures in the past two years than in the previous 10 years combined, according to the National Rural Health Association. That could be just the beginning of what some health care analysts fear will be a crisis.

An additional 283 rural hospitals in 39 states are vulnerable to shutting down, and 35 percent of rural hospitals are operating at a loss, according to iVantage Health Analytics, a firm based in Portland, Maine, that works with hospitals.

Most of the rural hospital closures so far have occurred in the South and Midwest. Of those at risk, nearly 70 percent are in states that have declined to expand Medicaid under the federal Affordable Care Act, although some experts are hesitant to draw a cause-and-effect correlation. In some cases, the shuttered hospitals have been replaced by clinics offering urgent care and other outpatient services.

“When a hospital closes, the physicians leave. A lot of the health care infrastructure leaves. Sometimes the local businesses will leave … the schools suffer,” said George Pink, deputy director of the Rural Health Research and Policy Analysis Center at the University of North Carolina. “There’s a whole multiplier effect that really can devastate some towns.”

Big city hospitals have been closing at about the same rate as rural ones during the past five years, but an abundance of alternatives in most major metropolitan areas typically reduces the effect on patients. When a rural hospital closes, people might have to travel dozens of miles to reach the nearest hospital, an inconvenience that can sometimes be a matter of life or death.

In rural North Carolina last summer, 48-year-old Portia Gibbs died from cardiac arrest after waiting 90 minutes for a medical helicopter to arrive. She could have been at a hospital in less than half that time, had not the Vidant Pungo Hospital in Belhaven closed just six days earlier.

Her death prompted Belhaven’s mayor to walk 273 miles to the nation’s capital in an attempt to raise awareness about the plight of rural hospitals.

Mayor Adam O’Neal plans to lead a similar march June 1 with supporters from at least 41 states. The city now is trying to acquire the old hospital through eminent domain and is seeking $6 million in federal loans to re-open it.

Since Gibbs’ death, O’Neal said, several other people have died before they could make it to more distant hospitals, including a 16-year-old boy hurt in a farming accident in April.

“We have people needlessly dying,” O’Neal said.

Since Belhaven lost its hospital last July, rural hospitals also have shut down in other states, including Mississippi, Ohio, Tennessee and Texas. Steady declines in population, depressed local economies and changes in inpatient admission guidelines were the prime factors.

Rural areas tend to “have older, poorer, sicker populations,” said Michael Topchik, senior vice president of iVantage.

That means they often have a higher percentage of patients covered by Medicare and Medicaid, government health care programs that pay a lower reimbursement rate than private-sector insurers. Hospitals that rely heavily on those programs have been particularly hard hit by federal budget cuts and provisions in the 2010 federal health care law that reduced charity care reimbursements and linked a portion of hospitals’ Medicare payments to quality standards and readmission rates.

The effects of the federal health care law were the prime factor leading East Texas Medical Center to close three of its 12 rural hospitals last year, said Perry Henderson, the hospital system’s senior vice president for affiliate operations.

“The small rural hospitals are the most brittle of the bunch,” Henderson said. “When you began cutting on those reimbursements, it hits their margins and pretty quickly drives those hospitals to some pretty significant losses.”

The framers of the federal health care law assumed the cuts would be offset as more patients became covered by private insurance and Medicaid. But Texas, which has the nation’s highest uninsured rate, is among 21 states mainly in the South and Great Plains that have declined to expand Medicaid eligibility.

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