Rural Hospitals Face Increasing Challenges

Financial pressures continue to take their toll on rural hospitals. Many of these small facilities are working to develop and implement strategies to stay viable, however their situations are challenging, to say the least.

Here’s a roundup of recent activities occurring in several states, but these developments are representative of what is occurring in many communities across the country.

In Georgia, a “Rural Hospital Stabilization Committee” was created by Governor Nathan Deal in March to facilitate communications between hospitals and the state. The committee met earlier this week to evaluate how “free-standing emergency room models” could work in rural hospitals.

In Alabama, six rural facilities have closed in the previous 18 months, but 22 are experiencing serious financial pressures. In Tennessee, at least 28 hospitals are facing significant budget cuts or outright closures, such as Haywood Park Community Hospital, which stopped providing inpatient services July 31.

In Arkansas, Crittenden Regional Hospital in West Memphis announced it is closing September 7, and the East Texas Medical Center Regional Healthcare System recently announced it is closing its facility in Gilmer at the end of this year.

In South Carolina, where average occupancy rates are at 60 percent, some rural facilities are reporting rates under 10 percent. One S.C. facility with 59 beds, Wallace Thomson Hospital in Union County, operated for several years at less than 25 percent capacity. After adding over $20 million in debt to its balance sheet, it recently filed for Chapter 9 bankruptcy protection.

The “Post and Courier” newspaper in South Carolina recently reported that the state legislature has approved some funding to help hospitals “transition from business models based on filling beds to other models less reliant on inpatient services.” Other financial assistance is available through CMS, which recently extended its program to increase payments to hospitals with low Medicare inpatient volumes.

For more information on the state of rural hospitals, visit: http://www.fiercehealthfinance.com/story/rural-hospitals-struggle-keep-doors-open/2014-08-26
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