Ailing Rural Hospitals Like SCH May Have Tough Time Surviving Coronavirus
Have you been reading the national news stories about the pressures of this crisis on not only the urban medical centers, but the rural hospitals? You may be asking yourself and your neighbors if your local hospital can weather this storm both medically and financially. Admittedly, the winds are picking up and the clouds are circling at Scotland County Hospital & Clinics.
Nationally, rural hospitals are holding their breath as they watch the COVID-19 tsunami wash over major US cities and approach the small communities. The coronavirus is taking an all-American road trip through the interstate system across the country and slowly infiltrating rural America. Given the high rate of communicability of the virus, no town, no matter how small and remote will likely be unaffected.
Financially, it’s no secret that most hospitals in rural communities don’t have a big profit margin. The truth is, the majority are operating in the red. Rural healthcare was in a crisis before COVID-19 paralyzed the nation. Long before the COVID-19 threat, rural hospital’s profitability had collapsed nationwide due to a combination of narrowing Medicare reimbursements, a larger share of patients lacking high-paying private/commercial insurance and the fact that rural hospitals’ patient populations are older and sicker due to the thinning out of rural America. Given such pressures, more than 125 rural hospitals have been forced to close over the past decade. Missouri finds itself in exclusive company: It is one of five states where 40% or more of its rural hospitals are deemed vulnerable, according to an analysis by the Chartis Center for Rural Health. A solution for many of the vulnerable hospitals is aligning with larger regional health systems that leverage shared resources and expertise to reverse their red margins and provide sustainable local health care for their communities. The real threat may be that vulnerable rural hospitals won’t be able to keep their doors open as the COVID-19 pandemic saps their cash, just as these small, rural communities most need their hospital.
How does all of this impact your local hospital? Early on in this mess, officials from Scotland County Hospital in Memphis, MO, knew the hospital was on life support. In fact, Randy Tobler, MD, FACOG, CEO, told a reporter with the Kansas City Star back in March that with the current cash in the bank, the hospital might last until mid-May before it runs out of money — and that was his rosy projection. Since that interview, there have been a few lifelines thrown to catch the hospital. White House administrative actions have allowed SCH clinicians to provide telehealth to sheltered-in patients during the Public Health Emergency, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress on March 27th provides emergency cash advances equivalent to 125% of the previous six months Medicare hospital reimbursements. CARES also temporarily reverses the 2% sequester cut to all Medicare payments that has hurt the bottom line since 2014. Healthcare providers, at all levels, are working to ensure they are ready for this disaster, and this money strengthens the hospital’s position over the short term as it prepares for the COVID surge to hit the heartland. The fear is the CARES Act money will be too little too late.
Additionally, to proactively address the hospital’s financial projections as the crisis developed, the community may have heard of the reduction in hours, lay-offs and elimination of positions that took place at the hospital & clinic the last week in March. “When patient utilization plummeted by 80% after patient self-selection in early March, followed by medical staff-recommended restriction of all non-essential services, we had to take drastic measures to reduce our expenses. This came in the form of workforce reduction across all departments, and physicians and mid-level clinicians were asked to take a pay cut as well,” said Tobler. “The reduction of staff and hours was an extremely difficult and emotional one, both because of the human impact on our SCH family members and because these staff members may, very well, be needed when the pandemic reaches its peak and the hospital gets a surge of ER and inpatients. We will have to call back some of those employees, and we know that. Anyone can understand we have to figure out how to keep our doors open until that happens.”
The hospital and clinics are still seeing some patients. Those patients are opting to come into the facility for essential appointments. Others are embracing the virtual visits that are offered with most of the clinicians. Some patients are opting for their necessary blood draws conducted while they stay in their vehicle. Bonnie Dalton a recent Lab patient said, “I didn’t want to go inside. I have a cold and I didn’t want to spread it around.” She was met at the Main/ER entrance by Randy Watkins, Phlebotomist, for her blood draw. ER patients arriving by car are now being asked to stop at the tent located near the Main/ER entrance in an effort to reduce the chances of the coronavirus being transmitted into the facility.
Ironically, at a time when their financial stressors are on steroids, rural hospitals and health departments are preparing for the COVID surge predicted by all available public health modeling. Just exactly how and when it will cross the line into their communities exerts tremendous operational pressure at all levels. Planning for the unknown is expensive and frustrating for all hospitals. Meanwhile, because routine medical needs don’t take a COVID break, keeping the stock room inventory at safe levels of Personal Protective Equipment (PPE) while paying higher prices for many daily supplies needed adds to the worries, and that’s if the vendors can even fulfill the orders placed.
It’s not a matter of if; it’s a matter of when. The vast majority of the data coming out about how COVID-19 is moving through communities is based on metropolitan projections. Rural healthcare providers and health departments are flying blind, both due to the wide range of projections, as well as a literal lack of rapid turnaround test kits, which are currently being allocated only to the “hot spots”. That translates to longer wait times in isolation for patients…. and accelerated “burn rates” of scarce PPE.
Officials from many rural hospitals across the nation worry any government assistance may come too late. There is an incredible opportunity for the rural hospitals to help meet possible bed shortages during the COVID-19 pandemic. Tobler said, “The government needs to act sooner rather than later; with little red tape to get this money into our bank accounts. Scotland County Hospital can weather this storm and be here in the future to serve this community if the CARES Act monies can stabilize us, and the next rescue packages which are already in the embryonic stage, fortify us as business slowly returns to some semblance of normal. And, when we do get on the other side of this, we will be even more thankful to our community for their continued commitment in utilizing local healthcare. That support, during this crisis and beyond, is what sustains all of us at SCH, as it has throughout our 50 year history.”