A new government model up for discussion offers promise for saving rural hospitals from extinction. But preserving essential services such as emergency care will come with difficult trade-offs.
Mirla Coleman, like many rural Kansans, wants more than just seeing her multigeneration farm continue to thrive. She wants her grandchildren to have the amenities and the opportunities she had growing up. And that includes access to a local hospital.
When a community meeting was scheduled a year ago to discuss financial problems at the Decatur Health hospital in Oberlin, she feared the worst and turned out with another 80 or so residents to learn more.
“I keep just hoping against hope,” she says.
“I feel like with medical costs the way they are, and the aging population, it may be coming whether we want it or not.”
The “it” that Coleman fears is the hospital’s closure.
It is a common fear across Kansas, where health care faces a deepening crisis. Seventy-five of the state’s 99 rural hospitals have been operating in the red, some for years, and many are in danger of closing.
Now, a new model that offers a possible path to survival is coming. But it comes with its own set of challenges.
Included in Congress’ year-end COVID-19 legislation was the establishment of a rural emergency hospital designation, a new class of Medicare provider with higher reimbursements. It’s designed to help communities hang onto services that residents consider the most crucial – 24/7 emergency care, routine family practice services and more. The trade-off is giving up acute inpatient care, a sacrifice likely to be emotionally painful for many communities.
The Centers for Medicare & Medicaid Services still needs to adopt numerous rules and regulations by Jan. 1, 2023, the implementation date. But the Legislature adopted and Gov. Laura Kelly has signed legislation that changes Kansas law to be compatible with the new federal designation.
Over the next year and a half, the Kansas Hospital Association, in partnership with the Kansas Health Foundation and the United Methodist Health Ministry Fund, will bring a conversation like the one in Oberlin a year ago to more communities. The idea is to help residents understand the financial problems facing their hospitals and the implications of the new legislation. The University of Kansas Public Management Center will facilitate the discussions.
“We know there are a lot of things that have to be considered,” says Jennifer Findley, the hospital association’s vice president for education and special projects. “Our goal is to make sure that we address as many impacts and potential impacts as possible to help communities decide if the model is a fit for them.”
Navigating change is never easy, but understanding the necessity for it and having time to plan for it can help communities avoid the painful jolt of having their local hospital turn out the lights and lock the door, says Kris Mathews, chief operating officer for Decatur Health, which serves Oberlin and surrounding communities.
“Just the idea of giving up on inpatient care leaves a bad taste,” Mathews says. “Our community was not infatuated with the idea. However, if it comes down to either giving up inpatient care or losing the hospital altogether,” the choice became pretty clear.
County residents approved a mill levy increase in 2016 and Mathews says the hospital has benefited, but finances are still far from ideal.
“The residents were glad we were open, honest and transparent about the situation and the possibility of giving up inpatient care,” he says.
Too Late for Some
Six rural Kansas hospitals have closed in the last decade. The first, Central Kansas Medical Center in Great Bend, closed in 2011. Mercy in Independence closed in 2015; Mercy in Fort Scott closed in 2018. Oswego and Horton, both owned by Empower HMS, closed in 2019; and Sumner County in Wellington closed last year.
Wellington found itself with no emergency services just as COVID-19 emerged in March 2020. While abrupt, the closure was not surprising to many city officials and health care workers, who had observed years of struggling.
“It was a nightmare,” says former Wellington Mayor Shelley Hansel. “The city owns the building and we stopped charging them for utilities to help. There were just too many problems.”
After a year with no emergency care, Wellington worked out an agreement with Ascension Via Christi in Wichita to open a new, emergency-only unit in March 2021. Ascension Via Christi remodeled the ER and brought in new furniture and technology. Today the bright, modern ER stands in stark contrast to the rest of the outdated hospital, which had deferred maintenance for years.
Independence replaced its hospital with Labette Health, a new, standalone emergency facility that operates as an extension of the hospital in Parsons, 28 miles away. Labette Health has also opened an emergency and basic services center in Oswego. Fort Scott opened a 24/7 emergency hospital under the license of the hospital in nearby Pittsburg, which is also owned by Ascension Via Christi.
All of the new emergency facilities are equipped with on-site imaging and laboratory services as well as a hospital pharmacy, the primary support services for an emergency room.
Brian Williams, the CEO of Labette Health in Independence, says the hospital closing was a hard blow but the standalone emergency room is serving the community.
“It’s not perfect. But we have a 24-hour ER, an observation bed and a rural health clinic to provide outpatient care. We have saved lives. We have a helicopter, and we can be in Parsons in minutes. The challenge is to be able to step back and look at how we can preserve access to the health care most needed,” he says.
Bruce Witt, chief advocacy officer of Ascension Via Christi, says the operation of the Fort Scott and Wellington ERs was made possible by Via Christi’s nearby full-service hospitals. He says the proposed rural emergency hospital model looks a lot like what has developed in those communities.
“We are pleased that what we have in Fort Scott and Wellington is working for now,” he says. “We don’t know if they will be eligible for the new designation. We would certainly welcome the opportunity to designate them as rural emergency hospitals and get a more favorable reimbursement. It would help secure the future.”
How We Got Here
The crisis in Kansas health care is rooted in demographic trends, technological change, an outdated payment model, government regulations and financial resources.
The rural population continues to age and shrink. Population in rural areas and small towns is projected to decline by 22% by 2064. Kansas as a whole is projected to grow by only 0.4%, and more than two-thirds of that growth will be in the over-65 demographic. About one in four Kansans will be older than 65 by 2064.
Technology has been nothing short of transformative. Procedures that once required a hospital stay are now done in outpatient surgical centers.
Findley offered cataract surgery as an example.
In the 1970s, cataract surgery took about an hour and required one or two days in the hospital. Now it is a 10-minute outpatient procedure.
At the same time, Kansas’ quality of health care rankings have sunk. Over the past 30 years,
Kansas has seen the greatest decline in its health rankings of any state. It ranked ninth overall in 1990 but fell to 34th in 2020. Even as funding has fallen, demand for infrastructure remodeling to keep pace with technological change has increased. Ordinary repairs, such as replacing roofs, windows, flooring, lighting and even paint, have been postponed as scarce dollars are spent elsewhere.
Adding to the pressure on rural hospitals, too many patients are either not insured or are covered by Medicaid or Medicare. Reimbursements from Medicaid pay only about 55% of the true cost of services. Medicare pays about 99%; the uninsured pay little or nothing.
Regulations specify how space in the hospital can be used, and telemedicine is restricted by both regulation and available infrastructure, including high-speed internet.
For Kansas hospitals, the Legislature’s failure to expand Medicaid eligibility to all adults earning less than 130% of the federal poverty level has also hit rural hospitals hard, officials say.
The Affordable Care Act of 2010 ordered Medicaid expansion and provided for federal reimbursement of almost all the costs, paid for by a reduction in Medicare reimbursement to providers. The reasoning was that adding Medicaid coverage would more than make up for the reduction.
However in 2012, the U.S. Supreme Court ruled that states could not be forced to adopt Medicaid expansion. Kansas is one of 12 states that have not expanded the program. Kansas providers have foregone more than $5 billion over the last nine years, only to see Kansas dollars flow to other states that have expanded Medicaid.
Conservatives in the Legislature, such as House Majority Leader Dan Hawkins of Wichita, have argued that Medicaid expansion wouldn’t have saved the most high-profile rural hospitals that have closed and that the bulk of taxpayer funding would go to the state’s 10 largest hospitals, not struggling rural entities.
The Lessons of Covid-19
But it’s health care’s most recent crisis, the COVID-19 pandemic, that illustrates some of the challenges that could accompany the rural emergency hospital model. Focusing on emergency and routine services means relying on larger, regional hospitals to provide in-patient beds.
But what if there are no beds to be had?
When the pandemic hit Decatur County hard in October and November of 2020, Mathews saw inpatient numbers at Oberlin’s hospital soar. He also got a picture of how vital small, rural hospitals are in the overall patchwork of health care.
Without small hospitals to handle the original care and triage of pandemic patients, small city ERs would have been quickly overwhelmed, he says. Rural hospitals could screen patients and determine who really needed hospital care and who could just be monitored at home. The ability to keep some patients in the hometown hospital helped keep the larger hospitals from being overrun, he says.
Decatur Health’s staff of two nurses and one aide was stretched thin as it became all but impossible to find an available bed for those who did require hospital care.
“We tried to transfer patients, but it was extremely hard to find a bed. We were calling many different places – Omaha, Denver, Grand Island, Oklahoma City, Kansas City, Wichita, hospitals in Texas – but nobody could take them, not even the patients who didn’t have COVID,” Mathews says.
Decatur Health buckled down to provide the best care it possibly could.
“We were overworked and understaffed, but we did a damn fine job of taking care of those very sick patients,” Mathews says with pride.
Still, not having in-patient beds might impact the hospital’s ability to recruit the staff it needs.
Mathews says Decatur Health has talked with Community Hospital in McCook, Nebraska, a critical access facility less than 30 miles away, about serving as a transfer hospital for patients from Oberlin if Decatur Health were to shift to a rural emergency hospital.
What he’d like to see, he says, is the ability to rotate some of the staff, allowing full-time caregivers at Oberlin to periodically spend time in a larger hospital to keep their skills sharp.
“I think it would be beneficial to have our people spend maybe a week in Hays or McCook and work a few shifts,” he says. “One skill that comes to mind is labor and delivery. While we no longer have planned deliveries here, that doesn’t mean we don’t sometimes have them.”
“It’s flat-out difficult to recruit staff to rural areas now,” Mathews says. “I am concerned that not having in-patient care would make it even harder to get people to work here.”
Being able to rotate staff to larger hospitals might help attract or keep workers, he says.
Putting Off Care has High Price Tag
But not having a minimal slate of services has a price tag, too.
Tim Hay, who heads the Wellington Fire Department and serves as EMS chief, says he will never forget getting the call, telling him that the hospital down the block was closing.
“I can’t say I was surprised,” he says. “The signs were there for many years. The hospital owed a lot of creditors. It kept laying off staff, and the facility itself needed a lot of repairs – a new roof and other things. But still, when that call came, it was a blow.”
One disturbing pattern he saw in a year without an emergency room was a delay in people seeking care.
“The biggest impact was to the patients who would go into the hospital for treatment and go home,” he says. “Those people just delayed care until they got sicker and sicker. We had people who refused transport because they didn’t want to go out of town. But holding out means they are sicker when they do get to the hospital and they have longer stays, more complications and worse outcomes. And that has a human cost as well as a financial cost.”
Hay agreed that an expansion of Medicaid in Kansas would be a huge benefit, although there’s little indication that sufficient numbers of Republicans in the Kansas Legislature will drop their opposition anytime soon.
“It goes back to those patients who are putting off getting care,” he says. “Some of that goes back to being afraid of what the bill is going to be. A lot of rural residents don’t have insurance, and they don’t qualify for Medicaid as it stands now. More of them would probably get care if they had help with the bills.”
Considering Transportation Challenges
While the ER model would relieve some pressures, it could put increased strain elsewhere in the system.
For many EMS departments, Hay says, the change to a rural emergency hospital would strain the ability to transport patients to regional hospitals.
“We are lucky here in Wellington because Wichita is close. For a lot of towns, the trip to the regional hub hospital is a much longer drive.
“Those communities are going to have to budget for increases in ambulance costs and for more personnel.”
He added that many communities depend on volunteer firefighters to staff their EMS, and the number of those volunteers is declining.
“It’s time-consuming and expensive to keep up with the training requirements, especially if you have to take a day off work and go out of town for workshops,” he says.
“In addition, many communities have older ambulances, and more trips over longer distances is going to mean more money on equipment and repairs. And I think there needs to be an understanding going in about how much it costs to equip an ambulance. Just one heart monitor costs around $35,000. For some small communities, that’s a whole year’s budget.”
A Success Story
The decision that many communities will face will be difficult and guaranteed to stir up a variety of emotions and viewpoints. Will they shift toward an ER model or grow to serve patients regionally?
The choices are far from clear-cut. The experiences of Independence and Fort Scott offer one kind of lesson, but a few communities have gone in another direction.
As the hospital at Wellington struggled, the other hospital in the county, Sumner County Hospital District No. 1 in Caldwell, has thrived, and the community is in the process of building a new facility with even more services.
Why? Caldwell hospital CEO Brooke Bollman says it’s about a committed and involved community, tax support and some population advantages.
“We have tremendous community support here, not only for the hospital but for just about any project that benefits our residents. We have a tax district for the hospital that gives us predictable revenue and critical access status that gives a bump in Medicare reimbursement. Since the hospital at
Wellington closed, we have seen an increase in patients who would rather come to a smaller hospital than go into Wichita. We also draw some patients from northern Oklahoma, who are closer to us than they are to Enid,” she says.
The Kansas Hospital Association and its partners conducted regional meetings in a virtual setting in February and March in an effort to determine which regions are facing issues with the health delivery system, learn which services communities consider essential and review options.
The regional meetings also helped identify communities that might want to have an in-person conversation as the COVID threat subsides.
Hospitals or community leaders who would like to see a discussion in their community can find more information here.
- How would you diagnose the situation facing rural communities when it comes to their hospitals?
- What aspects of their challenges are technical? What aspects of their challenges are adaptive?
- How do you see the concept of “loss” playing out for rural communities shifting to a rural emergency hospital model? What advice would you give about speaking to loss in those communities?
A version of this article appears in the Summer 2021 issue of The Journal, a publication of the Kansas Leadership Center. To learn more about KLC, visit http://kansasleadershipcenter.org. Order your copy of the magazine at the KLC Store or subscribe to the print edition.
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