Rural hospitals in critical condition

RICHLAND, Ga. — Stewart-Webster Hospital had only 25 beds when it still treated patients. The rural hospital served this small town of 1,400 residents and those in the surrounding farms and crossroads for more than six decades.

But since the hospital closed in the spring of last year, many of those in need have to travel up to 40 miles to other hospitals. That's roughly the same distance it takes to get from Times Square to Greenwich, Conn., or from the White House to Baltimore, or from downtown San Francisco to San Jose.

Those trips would be unthinkable for city residents, but it's becoming a common way of life for many rural residents in this state, and across the nation.

Since the beginning of 2010, 43 rural hospitals — with a total of more than 1,500 beds — have closed, according to data from the North Carolina Rural Health Research Program. The pace of closures has quickened: from 3 in 2010 to 13 in 2013, and 12 already this year. Georgia alone has lost five rural hospitals since 2012, and at least six more are teetering on the brink of collapse. Each of the state's closed hospitals served about 10,000 people — a lot for remaining area hospitals to absorb.

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.

"The stand-alone, community hospital is going the way of the dinosaur," says Angela Mattie, chairwoman of the health care management and organizational leadership department at Connecticut's Quinnipiac University, known for its public opinion surveys on issues including public health.

The closings threaten to decimate a network of rural hospitals the federal government first established beginning in the late 1940s to ensure that no one would be without health care. It was a theme that resonated during the push for the new health law. But rural hospital officials and others say that federal regulators — along with state governments — are now starving the hospitals they created with policies and reimbursement rates that make it nearly impossible for them to stay afloat.

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.

"They set the whole rural system up for failure," says Jimmy Lewis, CEO of Hometown Health, an association representing rural hospitals in Georgia and Alabama, believed to be the next state facing mass closures. "Through entitlements and a mandate to provide service without regard to condition, they got us to (the highest reimbursements), and now they're pulling the rug out from under us."

For many rural hospitals, partnering with big health systems is the only hope for survival. Some have resorted to begging large hospitals for mergers or at least money to help them pay their bills. But Douglas Leonard, president of the Indiana Hospital Association, said these days, "I'm not sure they can get anyone to answer the phone when they call."

County and town council members, hardly health care experts, are faced with life or death (or least injurious) decisions on whether to raise taxes in poor towns and counties that depend on their hospitals for care as well as good jobs. Some rural hospitals, even their advocates acknowledge, are in such bad shape and serve so few people that they probably don't deserve to stay open. But what about those still providing good and needed care? In those cases, rural residents lose out.

There's a "golden hour" after heart attacks, trauma and stroke in which treatment is needed to prevent loss of heart muscle and brain tissue, says Janis Orlowski, chief medical officer for the Association of American Medical Colleges.

With just two ambulances, which are often tied up making the average 90-mile round trip to the nearest hospital, "We're pretty much shot around here with the golden hour," says Ed Lynch, Stewart County's director of emergency medical services.

"It's never OK for these people to get lower quality medical care," says Orlowski, a practicing nephrologist (kidney doctor) and former hospital chief operating officer. "We're a big enough country to figure this out."

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The ambulance got to Walter Skellie in plenty of time in September. But the 45-minute ride to the nearest hospital since Stewart-Webster closed was so long he became violently ill. He had two strokes hours later.

Skellie, 59, who had to do rehab for balance and numbness issues after his strokes, was out of work for more than a month. "If the hospital had been down there, the doctors on call could have stabilized me," Skellie says. "I'm not saying the stroke wouldn't have happened, but I would have gotten medical attention a lot sooner."

Peanut and cotton farmer Buren "Bill" Jones, 52, died of a heart attack a month after Stewart-Webster closed. His family had to wait about 15 minutes for an ambulance to take him to a hospital 22 miles away, where doctors couldn't revive him. The closed hospital was 9 miles from his house, a distance his wife or daughter — who performed CPR on him at home — might have driven.

Stewart County Coroner Sybil Ammons says the deaths of at least one other heart attack patient and a stabbing victim would likely have been prevented if their local hospital was open. She says the stress from Skellie's violent vomiting in the ambulance probably increased pressure on his brain and made the strokes more severe.

"We saved lives," says Ammons, who was a nurse at the Stewart-Webster. "We saved a lot of lives."

Many U.S. counties had no hospitals after the Great Depression and World War II. But the 1946 Hill-Burton Act sought to change that with grants and loans for the construction of new hospitals. The number of hospitals soared, creating the backbone of today's modern health system.

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.

After consulting with the National Governors Association, HHS awarded $100 million to states in July so they could provide grants for technical support to help doctors and hospitals reform health care delivery for people on Medicaid, she says. Change, including a move to costly electronic health records required under the ACA, can be difficult, and Burwell says HHS will "work to incorporate feedback" from rural hospitals on how it's going.

"Transition takes time," she said.

But the $1 million or more it was going to cost to change over to electronic records was one of the last straws for Randy Stigleman, former owner of Stewart-Webster. Efforts to sell the hospital never panned out.

The anger residents feel toward Stigleman is palpable here in Richland. He appeared to shut the hospital down suddenly — giving them only a week's notice. But Stigleman says he just couldn't put any more money into the hospital.

While mergers and partnerships with large health systems are one way for hospitals to survive, "once they look at the demographics of Richland, nobody's going to give you money," he says.

Even if they aren't regularly filling their beds, rural hospitals are typically among the largest employers in their areas. Stewart-Webster, with its 75 employees, was only topped by a large immigrant holding prison. Once a hospital closes, it usually takes other businesses with it — and thwarts efforts to attract more, city and county officials say.

Richland Mayor Adolph McLendon says two dollar-type stores in town closed, and the local Subway shop left, since the hospital shut down. When he's not trying to find investors to help him open another health care facility, the 74-year-old mayor is often trying to attract new businesses.

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 in Stewart County, and across the U.S., officials repeatedly describe a "perfect storm" of cuts in reimbursement and tougher regulations under ACA, especially those that penalize them when they have to re-admit patients and require them to use electronic health records.

It's a storm that's swept through several states:

• Tennessee: Three hospitals have closed or stopped offering inpatient services since January, and "our concern is there's going to be many more," says Craig Becker, president of the Tennessee Hospital Association. When a hospital closes, he says, the ripples reach far beyond, sometimes pushing out physician practices, pharmacies and other medical companies.

He says the states' decision not to expand Medicaid puts Tennessee hospitals at a disadvantage because they are still getting hit with government cuts that assumed all states would expand the program.

• Kentucky: Even expanding Medicaid couldn't save Nicholas County Hospital. The state's new Medicaid managed-care system brought slower-than-ever reimbursements — which were low anyway because most patients had government insurance.

Ultimately, Lois Gates, chairwoman of the hospital board, says it couldn't maintain a 24-hour ER, had to cut staff, and was $2.3 million in debt when it shut down in May. A sign near the empty emergency room says: "This facility is CLOSED. If you need immediate care call 911" and gives the locations of the closest ERs — nearly 20 miles away on winding country roads.

"We were trying to keep it open any way we can," said Mike Pryor, the county's judge-executive.

• Indiana: Many of the state's small hospitals are teetering, two recently closed, and one filed for bankruptcy, says Leonard, of the state hospital association. The state has 30 "critical access hospitals," which receive preferable reimbursement under the federal Medicare program — currently 99% of "reasonable" inpatient and outpatient costs. These hospitals have 25 beds or less, are almost always located in rural areas, and must be at least a 35-mile drive from the nearest hospital, or a 15-mile drive in mountainous or other hard-to-travel regions.

• Colorado: While none of the state's 49 rural hospitals have closed, a handful are "on the watch list," says Gail Finley of the Colorado Hospital Association. She says almost any hospital closing in Colorado would strand patients, since some hospitals are the only ones for 35 to 100 miles.

The day before USA TODAY visited Elbert Memorial Hospital in Elberton, Ga., this fall, the hospital had to borrow $200,000 from a hospital partner so it could make payroll. A month earlier, after contentious debate — and an ER visit for heart attack symptoms by a council member — the county council voted to pass a $500,000 property tax increase to fund the hospital.

The Tuesday morning visit found George Amah , a more expensive kind of temporary ER doctor, working a 24-hour shift, but with no current patients: "It can be really busy or really quiet," he says.

Amah works for a contract company that guarantees 24/7 physician coverage. Elbert CEO Jim Yarborough says he has to pay that company more than he would for staff doctors, but he can't attract enough staff for round-the-clock coverage because so few want to work in rural areas.

Upstairs in a renovated room, Greg Willoughby , a beefy former truck driver now on disability, is one of the only signs of patient life this late September morning. He's recuperating from cellulitis, a potentially life-threatening bacterial skin infection. "I hope they don't ever go out of business," Willoughby says. "What would happen to people who have heart attacks and a lot worse conditions than I have?"

While providing a large share of care for the poor, rural hospitals also face growing expenses for staff, equipment and especially facilities, many of which are not up to code because they were built so long ago.

"There's kind of a tipping point when they can't afford the repairs and may need new buildings," Finley says.

As of June 30, there were 1,326 critical access hospitals across the USA — which critics argue is too many. A study last year by HHS' Office of Inspector General found two-thirds of these hospitals wouldn't meet location requirements if they had to re-enroll in Medicare today, and most wouldn't meet distance requirements, either. The study recommended that hospitals be dropped from the program unless their Medicare patients "would otherwise be unable to reasonably access hospital services." In a new report on high Medicare costs at these hospitals, the OIG again recommended some hospitals be dropped earlier this month, a move that Lewis said "would be a killer of killers" for rural hospitals.

Meanwhile, as this debate continues in Washington, it's having consequences in local communities.

The fate of hospitals is left in the hands of county boards in Stewart, Elberton and Lavonia counties, which represent a cross-section of those working in the few businesses that remain. They include chicken farmers, granite company salesmen, a fertilizer salesman, a pastor and a few other "good old boys," as Elberton-Elbert County Hospital Authority Board Chairman Jim Lloyd calls them.

When it comes to complicated health care issues, asks Orlowski. "How can the local townspeople, no matter how good they are, make the decisions?"

Belhaven, N.C., Mayor Adam O'Neal walked 273 miles to Washington in July to protest the closing of the local Vidant Pungo Hospital July 1. Though he blamed state officials for not expanding Medicaid, much of his ire was directed at Vidant Health, which acquired the hospital and then closed it a couple of years later. He says the company reneged on a deal that would have kept the hospital open and decided instead to expand facilities elsewhere and open a 24-hour clinic. Vidant says the town didn't have a viable plan to keep the hospital open.

Big companies aren't rushing out to buy these hospitals, either.

In Kentucky, officials hoped Nicholas County Hospital would be saved when one of the state's largest health care companies, KentuckyOne Health, took over a three-year management affiliation from its predecessor. Matt Gibson, KentuckyOne's vice president of strategy and business development, says his company did a lot to aid the hospital, such as helping it pass an accreditation and recruit advanced practice nurses.

Buying the hospital "is something that we evaluated, but it didn't fit with our strategic plan," Gibson says, particularly with health care moving to outpatient care.

"I guess they saw how financially unstable it was," says Gates, of Nicholas County.

The majority of the nation's hospitals — big and small — are nonprofit, meaning they must provide community benefit in exchange for tax exemptions. As such, big companies "do have a responsibility to help, although they need to remain solvent themselves," Kentucky State Auditor Adam Edelen says.

If something isn't done soon, Edelen says, many more patients will suffer. In his state, rural hospitals serve nearly half the population — one stabilized his father when a farming accident mangled his hand. And Pryor, the Nicholas County judge-executive, says his community's now-closed hospital saved his father's life twice after heart attacks.

"I don't want to be in a Kentucky where a farmer has to bleed out in a field because he doesn't have access to a rural hospital, or a woman with a troubled pregnancy can't get the help she needs to deliver a healthy baby," Edelen says.

Edelen's office decided to do "financial stress tests" on 66 rural hospitals there and has sponsored 10 packed public hearings on the topic that have attracted residents, hospital officials and employees.

In addition to such grass-roots efforts, advocates say government can do more; state legislatures can adopt policies that bolster small hospitals, and the federal government can pay Medicare and Medicaid providers at least their costs and revamp the critical access program in light of the ACA.

But they say none of these are magic bullets, and true solutions are likely as varied as the myriad affected communities in the nation's vast rural expanses.

O'Donnell reported from Georgia and McLean, Va.; Ungar, who also reports for The (Louisville) Courier-Journal, reported from Kentucky. Database reporter Meghan Hoyer contributed to this report.