Gov. Nathan Deal’s proposal that rural hospitals save money by transforming themselves into freestanding emergency departments has one big problem.
Experts say the idea never made financial sense and probably never will.
Important as they are to small communities, ERs treat large numbers of poor and uninsured patients and are typically money losers for hospitals. A standalone ER in rural Georgia would lose an estimated $700,000 to $1.2 million a year, according to an analysis by Draffin & Tucker, an accounting firm with offices in Atlanta and Albany with a specialty in health care.
Dr. D.W. “Chip” Pettigrew with the Georgia College of Emergency Physicians said recently that such facilities are almost impossible to find outside big cities.
“They are totally not economically viable in rural areas,” Pettigrew said.
As of this week, no Georgia hospital had applied for the standalone ER status.
How we got the story
This is the second installment in a three-part series examining the finances of rural hospitals in Georgia.
For this article, The Atlanta Journal-Constitution analyzed five years of the most recent financial data that rural hospitals reported to the state as of Dec. 16 to determine how many had lost or made money during that period. The AJC then gave each of the hospitals an opportunity to review the numbers. Fourteen said the numbers — which are provided by the hospitals themselves to the Georgia Department of Community Health — are inaccurate. Most of those said that their losses are overstated and don’t count other non-hospital service lines, such as nursing homes and primary care clinics. However, even with the additional income, seven of the 14 acknowledged that they still lost money.
In addition to the AJC’s data analysis, staff writer Misty Williams traveled nearly 1,000 miles across rural Georgia interviewing residents, hospital executives, state legislators, county officials, business owners and others affected by the crisis rural hospitals face.
Coming Friday: The concluding installment explores how some hospitals have turned to their county governments for extra money. Some counties can deliver, and some can't.
How we got the story
This is the second installment in a three-part series examining the finances of rural hospitals in Georgia.
For this article, The Atlanta Journal-Constitution analyzed five years of the most recent financial data that rural hospitals reported to the state as of Dec. 16 to determine how many had lost or made money during that period. The AJC then gave each of the hospitals an opportunity to review the numbers. Fourteen said the numbers — which are provided by the hospitals themselves to the Georgia Department of Community Health — are inaccurate. Most of those said that their losses are overstated and don’t count other non-hospital service lines, such as nursing homes and primary care clinics. However, even with the additional income, seven of the 14 acknowledged that they still lost money.
In addition to the AJC’s data analysis, staff writer Misty Williams traveled nearly 1,000 miles across rural Georgia interviewing residents, hospital executives, state legislators, county officials, business owners and others affected by the crisis rural hospitals face.
Coming Friday: The concluding installment explores how some hospitals have turned to their county governments for extra money. Some counties can deliver, and some can't.
ARLINGTON, Ga. — A stack of mattresses and a lone IV pole gather dust outside the emergency room entrance at Calhoun Memorial Hospital near this little town in southwest Georgia. The cost of health care may be going up, but the only thing going up here are the weeds around the building, which has sat empty since early 2013.
Toward the end, Calhoun Memorial had many more people on the payroll than it had patients to treat.
Declining populations, fewer paying patients, rising expenses and falling incomes have doomed many of Georgia’s rural hospitals. A group of state lawmakers, hospital officials and others has spent much of the past year searching for ways to help dozens of the small institutions stay afloat.
They’re still searching.
“There were a lot of things that got them into trouble, and there’s not one particular silver bullet to get them out of trouble,” said Rep. Terry England, R-Auburn, who co-chairs Gov. Nathan Deal’s Rural Hospital Stabilization Committee. “Some of them may be too far in the hole.”
Statewide, eight rural hospitals have closed since 2001. Nearly two-thirds of the 61 remaining have suffered steep losses in the past five years, the latest state data shows.
The government may be looking for answers, though there may be nothing it can do, at least in the short-term, to help those hospitals suffering the most. Deal's study committee, formed last year to figure out how to save rural hospitals, is expected to issue recommendations that could form the basis of a bill in the Legislature.
The governor’s spokesman, Brian Robinson, said Deal has already expanded the number of residency slots for doctors-in-training to help keep more doctors in Georgia, some of whom he hopes will locate in high-need rural areas.
But the other fix Deal has proposed — enabling hospitals to downsize into freestanding emergency departments — has found no takers in the state so far and probably won't, experts say. (See accompanying box.)
‘Little towns don’t need all that’
Any solutions that do emerge will come too late for Arlington and its neighboring town, Edison, population about 1,500.
Business is down at the local pharmacy since the hospital shuttered, though it’s still holding on, said Reeves Lane. He owns the drug store and has been Edison’s mayor for nearly 25 years. The area has lost jobs, and people spend their paychecks in the towns they now work in, Lane said.
The closest hospital is about 16 miles away. Two others lie within 30 miles.
“We do have facilities around us,” Lane said. “We just sure hope they’re able to stay open.”
The truth may be that not every community needs a hospital, said Calhoun County Commissioner Richard West. The 30,000 people in this region once had four, now down to three, hospitals, West said. An area needs at least 40,000 residents for a single hospital to be viable, estimates Jimmy Lewis, CEO of HomeTown Health, a company that works with struggling rural hospitals across Georgia.
Said Commissioner West: “We used to think every little town needed a post office, a lawyer, a drug store, a supermarket, a hospital, a courthouse, a police chief, but that was prior to the Internet and cell phones. Little towns don’t need all of that.”
‘I can’t make the math work’
Charles Cox doesn’t see it that way.
Calhoun Memorial needed not just more patients but more paying patients, said Cox, who heads the hospital authority board. Expanding Medicaid under the Affordable Care Act would help achieve that, he said.
Cox is among a number of local leaders, hospital officials and consumer advocates who believe that expanding Medicaid, the government health program for low-income people, would go a long way toward helping some of these rural facilities stay afloat. They acknowledge that expansion is no cure-all and, in any case, Deal and state lawmakers long ago rejected it as too expensive.
Expanding Medicaid might help prolong the life of some hospitals. But Rep. England says it can’t be a long-term solution, since Medicaid doesn’t pay enough to cover the actual cost of care.
“I can’t make the math work on how that helps,” he said.
The governor’s office has estimated that expansion would cost the state $2 billion over a decade. Expansion supporters, however, argue that a vastly larger Medicaid program would more than pay for itself once new jobs, new sales and income taxes and other economic benefits are factored in.
And some money is better than none at all, Cox said.
“If you have a responsibility to maintain some viable form of quality of life in a county, then we need whatever outside money we can get” for hospitals, he said. “Will it save them? I don’t know.”
Emergency services: expensive, essential
One of the most critical services communities fear losing when hospitals die off is emergency care.
Emergency services will be integral to any solution, said Courtney Terwilliger, board chairman for the Georgia Association of Emergency Medical Services.
Paramedics and emergency medical technicians today must have far more training and much more advanced skills than in prior decades, he said. In addition, ambulances are also now highly advanced, with automatic vehicle locators and telemedicine capabilities that connect EMTs directly with the doctors who will treat the patient they’re transporting.
The future of EMS is bright, but providers and counties are going to have to work together, Terwilliger said.
“The fear I have is that change is going to be like a tidal wave,” he said. “We either have to get ourselves a surfboard, get out of the way or drown.”
‘A much bigger problem’
For now, the stabilization committee is continuing to explore solutions, including the use of telemedicine and better coordination between rural hospitals and regional medical centers. Statewide, more than 50 schools already use telemedicine to connect nurses with doctors and specialists in metropolitan areas. Rural hospitals could also tap into that expertise, experts say.
Other options include federally funded health centers, greater numbers of primary-care doctors and creation of more urgent-care centers.
All those things would help, said Lewis of HomeTown Health, but he worries about the road ahead for rural hospitals.
“(The stabilization committee has) come to the realization that this is a much bigger problem than we ever imagined,” Lewis said. “To get our arms around this now is really posing some very difficult questions.”
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