2013 economic impact of small, rural hospitals
Rural hospitals are often one of a county’s largest employers and economic engines. For every $1 spent by hospitals, another $2.28 is generated in state and local economic activity, according to a recent report by the Georgia Hospital Association. These small hospitals also bolster communities’ economies in the following ways:
- $3.2 billion — total output/income generated
- $1.7 billion — total household earnings generated
- $185 million — cost of indigent and charity care provided, as well as bad debt
- 37,000 full-time jobs created
Source: Georgia Hospital Association
How we got the story
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 of the hospitals 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 Thursday: The series continues with an examination of how state leaders have responded to the crisis in rural hospitals — and whether their efforts are making any difference.
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.
Pam Renshaw doesn’t know how long she lay unconscious amid the flames.
Twenty seconds? Thirty? Long enough, at least, for the fire to sear nearly half of her body before Renshaw’s boyfriend found her pinned under the four-wheeler that had flipped into a pile of burning trash. Billy Chavis lifted Renshaw into his truck and floored it toward downtown Folkston.
But he wasn’t headed to Charlton Memorial Hospital in Folkston. There is no Charlton Memorial. It had closed 45 days before Renshaw’s accident.
“I didn’t know where to go,” Chavis recalled. His girlfriend lay on the seat in shock, burned so badly that Chavis didn’t know whether she would live or die. “It was just a lost feeling. I thought I was losing her.”
Seven other rural hospitals have closed since 2001 and dozens more are hemorrhaging money at an alarming rate — ultimately threatening access to critical health care for nearly one in 10 Georgians.
Of Georgia's 61 remaining rural hospitals, nearly two-thirds lost money in the year for which they most recently reported results, an Atlanta Journal-Constitution investigation has found. Twenty-one suffered budget shortfalls — many in the millions of dollars — for at least five years in a row, according to an AJC analysis of the latest hospital financial data from the state. Another 17 ended four of the five years in the red.
Only seven made a profit each year.
Rural hospitals have long struggled financially. But threats to their survival have intensified in recent years — falling patient volumes, aging populations, payment cuts by government programs and commercial insurers alike, large numbers of uninsured and new regulations created by the Affordable Care Act. Some run nursing homes, primary care clinics or other more profitable operations that help make up for some of the losses. Many don't.
The demographics and economics of many rural areas can no longer support hospitals, said Jimmy Lewis, CEO of HomeTown Health, a network of rural Georgia hospitals. People tend to be older, sicker and poorer than in urban regions.
“We’re approaching third-world care in the state of Georgia,” Lewis said. “The future has pain in it; there’s just no way around it.”
Georgia lawmakers, hospital executives and community leaders are scrambling for ways to stem the financial bloodletting. But the truth is that some hospitals are simply beyond saving.
People, inevitably, will die.
Five months in the intensive care unit
Roughly two hours. That’s how long it took Pam Renshaw, 52, to get to a hospital after her accident.
She had taken a corner too quickly on an ATV, tumbled into the fire pit and slammed her head on a brick, knocking her unconscious.
It took so long for an ambulance to arrive that Renshaw’s family and friends had already rushed to her side. That’s a common problem when rural hospitals shut down, experts say. Ambulance drivers must transport patients to other facilities that may be 30 or 50 miles away — leaving residents with no emergency help. The closest hospital to Folkston is 25 miles east in Camden County.
“It’s unbelievable that it happened and we didn’t have a hospital,” Renshaw said.
She was eventually life-flighted to a hospital burn unit in Gainesville, Fla. Renshaw spent seven and a half months there, five of them in the intensive-care unit.
If Charlton Memorial had been open, doctors would have at least been able to sedate Renshaw and wash her wounds, perhaps lessening the chance of infection, Chavis said he learned later.
Chavis, 59, has called Folkston home since he was 8; Pam, since she was about 9. He understands the hospital didn’t make money.
“Somebody along the line, we’re going to lose them because of it,” he said. “It’s a sad thing.”
‘Our ambulances are tied up consistently’
Buren Jones didn’t have to die.
The 52-year-old suffered a heart attack about a month after his local hospital, Stewart-Webster Hospital, closed in March 2013.
Normally, an ambulance could have reached him in five to seven minutes, said Sybil Ammons, coroner in Stewart County and former director of nursing at the shuttered hospital. But the area’s two ambulances were already driving patients to other hospitals 20-plus miles away. The family knew CPR, but it wasn’t enough.
“Our ambulances are tied up consistently,” Ammons said. “They could have saved him. I truly believe he would have had a chance.”
Another man who was stabbed and died would have had a much better chance at survival, she said. Yet another who suffered a stroke perhaps wouldn’t have as severe permanent damage if he’d had received help sooner, Ammons said.
“It’s really scary,” she said. “What’s going to happen to us?”
The farther ambulances are forced to travel to get to an emergency department, the more precious minutes are lost from the critical “golden hour” immediately after a heart attack or stroke.
The poor and elderly often suffer the most when hospitals die. Most don’t have cars or the money to pay someone else what Ammons calls a “ridiculous” price to transport them. Others can’t take time off from work to travel to another town for care. Their diabetes and other chronic conditions go untreated, inevitably becoming more severe and costly.
Surrounding hospitals are forced to shoulder a bigger burden of uninsured patients — threatening their own financial stability. Even patients who do have insurance face higher deductibles and often can't pay their bills. New rules created by the Affordable Care Act penalize hospitals, rural and urban alike, for too many avoidable "readmissions": patients who must go back into the hospital within 30 days of discharge.
The health law is also reducing support to hospitals under the assumption that they will have more paying patients under Medicaid expansion. But Georgia has rejected expansion.
Some counties can afford to subsidize their hospitals to keep them open; many cannot.
“We don’t have $500 million in a pot that we can pull out,” said state Sen. David Lucas, D-Macon. “We just can’t build hospitals; there’s just no way. These folks are being left without health care.”
‘Are you telling them to die on the vine?’
Nationwide, three rural hospitals closed in 2010, according to a report from the University of North Carolina. Fourteen closed last year. Many closures have been in the South in recent years, including Texas with eight, Alabama with five and Tennessee with three, the study shows.
Charlton Memorial closed in August 2013 just weeks before Renshaw’s accident. Hospitals in Glenwood, Arlington, Richland and Hartwell have also closed in the past few years.
It takes a population of about 40,000 in a region to support a hospital, said Lewis of HomeTown Health. Georgia has 109 counties with fewer than 35,000 people — many have far fewer. Experts say it may make sense for some hospitals to shut down if they don’t have enough patients to keep them viable.
Georgia’s rural population has fallen by nearly 25 percent to roughly 1.8 million people since the beginning of the 21st century.
Still, families have farmed these areas for generations, Lucas said at a recent meeting of the state’s Rural Hospital Stabilization Committee. Gov. Nathan Deal established the group last spring to address the ongoing crisis.
“We’re telling them to move out of their homes and into the cities,” Lucas said. “Are you telling them to die on the vine?”
But even having a sizable population isn't necessarily enough.
In Lavonia, Ty Cobb Regional Medical Center loses money on 80 percent of its patients, CEO Greg Hearn recently told a gathering of state lawmakers. Many of them are on Medicare and Medicaid, neither of which pay hospitals enough to cover the actual cost of care. The remaining 20 percent of patients would have to pay 300 percent or more of the cost of treatment just for the hospital to break even, Hearn said.
“The numbers don’t work,” he said. “It’s not sustainable.”
‘Take those roads (and) plow them up’
Cousins Andy and Doug Gowen aren’t ready to give up on Charlton Memorial Hospital.
Still acting as the hospital’s administrator, Doug Gowen is working with the U.S. Department of Agriculture to secure a loan designed to boost employment in rural areas that could reopen the hospital. The hospital was between $4 and $5 million in debt when it closed. Meanwhile, the county spends $700,000 a year to subsidize ambulance services.
“We want to do whatever we can to regain our hospital,” said Andy Gowen, board chairman of the development authority for Folkston and Charlton County.
Rural hospitals provide not only critical health care for communities but serve as a core economic engine as well.
They are often one of the biggest and best-paying employers in a community. They also can be vital in helping to attract new companies — and new tax dollars — to Georgia.
Statewide, rural hospitals supported nearly 37,000 jobs in 2013, a report by the Georgia Hospital Association shows.
But the closing of a rural hospital can be the nail in the coffin for potential deals to bring in new manufacturers. If someone gets injured using a buzz saw while cutting timber, access to immediate emergency care is a must.
This isn’t just a humanitarian issue, said state Rep. Alan Powell, R-Hartwell, whose own local hospital closed in 2012.
When a hospital closes, the pharmacies suffer, the florists suffer, the convenience stores suffer.
“Once you close your hospitals in a rural community, doctors leave,” Powell said. “You might as well take those roads, plow them up and plant pine trees.”
‘This is home and I’m not going’
More than a year later, Pam Renshaw is still healing from her accident.
An aqua-colored tracheal tube protrudes from her neck to help her breathe. Doctors have tried twice to remove it, but Renshaw stopped breathing both times. There will be a third procedure, but Renshaw is understandably worried about it.
“It’s a scary feeling when you can’t breathe,” she said.
Renshaw joined a group of neighbors not long ago at the Whistlin’ Dixie cafe in downtown Folkston.
The streets sat quiet on a sunny Wednesday morning. The cafe’s owner and former Folkston mayor, Dixie McGurn, served fresh apple crumble.
McGurn was born at Charlton Memorial in 1962. Her father was on the hospital authority board until he died in the early 1980s.
The hospital was struggling even then, McGurn recalled. She acknowledges that it makes little sense to put money into something that can’t sustain itself; that’s not how businesses run or how people handle their own finances, she said.
McGurn said that even though she wishes the hospital remained open, she has no plans to move away.
“This is where we call home, and I’m not going,” she said. “I’ll be buried right here.”