Some of Kentucky’s smaller, more rural hospitals are facing growing financial threats because of reduced government funding and a change in the way they’re viewed.
Kentucky has 29 “critical access hospitals,” a designation by the federal government for rural hospitals playing front-line roles in providing health care for poorer populations who don’t reside within easy traveling distance from larger acute-care hospitals.
Congress created the designation in 1997 for hospitals 35 miles from larger hospitals or those deemed “necessary provider of care” facilities that serve a large proportion of Medicare or Medicaid patients in areas of high unemployment or poverty. Such hospitals are restricted to 25 acute-care beds, provide 24-hour emergency room services and have an average inpatient stay of not greater than 96 hours.
But because of reductions in Medicare and Medicaid reimbursement rates and cuts related to the federal sequester, such hospitals as Caverna Memorial in Horse Cave, Marcum and Wallace Memorial in Irvine, or St. Joseph Berea, are finding it more difficult to operate.
During a press conference here Thursday at the Kentucky Hospital Association, Susan Starling of Marcum and Wallace Memorial said it’s unfair for those looking for cost savings to focus on CAH hospitals because “we’re just a small part of the healthcare budget.”
Elizabeth Cobb, KHA Vice President for Health Policy, said the nation’s 1,300 CAH hospitals account for only 2 percent of the nation’s health care costs.
But they provide “a tremendous safety net” for their clients, according to Charles Lovell, KHA Board Chairman and CEO of Caldwell Medical Center in Princeton in western Kentucky.
“All health care is local and these critical access hospitals provide good, high quality healthcare,” he said. Funding cuts for uncompensated care — services to those who cannot pay — he said, “would shut down many of our rural hospitals.”
Part of the problem is the unhappiness of many health care providers in Kentucky, especially hospitals, with the new managed care system of delivering Medicaid. But according to KHA’s president, they’re not unhappy with the expansion of Medicaid under the provisions of the Affordable Care Act, which Kentucky Gov. Steve Beshear has embraced while also implementing the managed care Medicaid system.
“Oh, yes, we want everyone to have coverage,” said Michael Rust. “We support expansion of coverage whether it’s Medicaid or whatever.”
Those speaking at Thursday’s press conference also said the small hospitals are important to a community economically.
Dr. Alison Davis, Executive Director of the Community and Economic Development Initiative of Kentucky and an associate professor at the University of Kentucky College of Agriculture, said the first thing businesses looking to relocate to a community ask about is access to health care. Lovell, the CEO of the Princeton facility, said such hospitals on average create 250 high-paying jobs in their communities.
And it’s more difficult to attract physicians and other providers to already under-served rural areas without a hospital, said Starling.
Cobb said the hospitals are key to a lot of the rural and the poor communities they serve.
“If you don’t have people using your hospital, then of course you don’t save it just for the sake of saving it,” she said. “But 41 percent of Kentucky’s population lives in rural Kentucky.”
A lot of them live in areas served only by older, two-lane roads or in Eastern Kentucky where travel time is much longer because of terrain and road routes and conditions.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at email@example.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.
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