A walk from the country

I received this note:

Join the rally cry for rural hospitals.

Walk with us to Washington, DC to save rural hospitals in America.

Rural hospitals are facing the greatest challenge to their existence in the history of our country. In the next year, 283 rural hospitals face the uncertainty of possible closure. It is time to act. We are asking rural hospitals from all over the country to send a representative to our June 1st, 2015 walk from Belhaven, North Carolina to Washington DC to petition Congress to pass measures to ensure rural hospitals sustainability. 

I was curious, as rural hospitals already get special treatment from the Congress.  For example, this article in Modern Healthcare notes:

A law that allows rural hospitals to bill Medicare for rehabilitation services for seniors at higher rates than nursing homes and other facilities has led to billions of dollars in extra government spending, federal investigators say.

Most patients could have been moved to a skilled-nursing facility within 35 miles of the hospital at about one-fourth the cost, HHS' inspector general said in a report being released Monday. Hospitals juggling tough balance sheets have come to view such "swing-bed" patients as lucrative, fueling a steady rise in the number of people getting such care and costing Medicare an additional $4.1 billion over six years, the report said.

The authors wrote that the windfall helps to "support a hospital's fixed costs and offset losses from other lines of business."

Legislation passed by Congress in 1997 created the designation of "critical access hospitals" to help small facilities in remote areas survive. Rather than paying set rates for services as throughout the rest of the Medicare system, the federal government reimburses the hospitals for 101 percent of their costs. They also often receive state funding and grants.

So I went to the walk website to see what more I might learn. It said:

Rural hospitals are facing the greatest challenge to their existence in the history of our country. In the next year, 283 rural hospitals face the uncertainty of possible closure. It is time to act. 

Now it is time for America to stand up and demand that Washington DC work on our rural hospital crisis. Our rural hospitals are just as important as any urban medical centers. We feed America and deserve to keep our current level of healthcare. When hospitals close, emergency rooms close and that means needless deaths -- our children, family members and neighbors. We have to stand up for ourselves and THE WALK will get Washington’s and the nation's attention.

Not helpful, so I looked elsewhere. It may be that Medicare's zeal to reduce readmissions and apply penalties to the "laggards" has an impact:

The Affordable Care Act was designed to improve access to health care for all Americans and will give them another chance at getting health insurance during open enrollment starting this Saturday. But critics say the ACA is also accelerating the demise of rural outposts that cater to many of society's most vulnerable. These hospitals treat some of the sickest and poorest patients — those least aware of how to stay healthy. Hospital officials contend that the law's penalties for having to re-admit patients soon after they're released are impossible to avoid and create a crushing burden.

But is also seems to be a state--not federal issue--arising especially in those states that have not chosen to use the terms of the Affordable Care Act to get federal aid to put more people on Medicaid:

Department of Health and Human Services Secretary Sylvia Burwell, in office since June, grew up in rural West Virginia and says she is "particularly acutely focused on" the challenges facing rural hospitals. More Medicaid expansion would go a long way toward addressing them, she said in a news briefing in October.

But the article offers mixed signals on that issue:

Low Medicare and Medicaid reimbursements hurt these hospitals more than others because it's how most of their patients are insured, if they are at all. Here in Stewart County, it's a problem that expanding Medicaid to all of the poorest patients -– which the ACA intended but 23 states including Georgia have not done, according to the federal government — would help, but wouldn't solve.

I'm not sure why the article refers to low Medicare reimbursements, given the special treatment of rural hospitals.  The Medicaid rates, again, are a state determination.

This summary seems to get to the heart of things:

Half of the rural hospitals that shuttered since early 2010 closed completely. Many of the rest now operate as rehabilitation and nursing facilities, or outpatient clinics. A few operate as emergency departments or 24-hour urgent care centers, offering some — but far from all — the services the former hospitals did. But Lewis and others say that while these 24-hour facilities could stabilize stroke or heart attack victims before they head on to larger hospitals, they are even less financially viable, given the poor, uninsured populations they serve and the fact that emergency rooms are the most expensive parts of hospitals.

Here's my take, but I'm happy to be corrected.  Rural hospitals have received special protection from the US government for years, as each Congressional district has them and as they are often the major employers in small towns. The degree to which they've operated as more full service institutions was only sustainable because of federal support, and many have likely incurred investment and staffing costs to offer services at a level that could not be justified, in terms of clinical volumes. Now, the pendulum has swung a bit, and a number of these hospitals are finding that the current revenue mix is unfavorable. With nowhere else to turn, the politically active local officials and advocates are going back to the well for more federal assistance.

And so it is here that we turn to Congress which, because of self-imposed limitations on the federal budget, will find itself making choices between these local hospitals and--among other things--funding for graduate medical education in the urban academic medical centers.  We are about to see zero sum politics in action.  Rural versus urban.  Community hospitals versus AMCs. Meanwhile CMS quietly supports incredibly wasteful investment in other areas, in response to behind-the-scenes lobbying from equipment manufacturers and investment bankers. I don't think this will be pretty.