In rural communities across America, more than 800 hospitals already faced financial peril before the pandemic took hold. Now, because of the coronavirus, many of them face closure.
For years, Lallie Kemp Regional Medical Center has spiraled further into the red.
“We don’t have any profit margin to speak of, so it will be a direct loss,” said Chad Thompson, the hospital’s chief financial officer. “And we don’t know how long this will last.” For 640 of these struggling medical centers, there is no other hospital in town. Nearly all of those in jeopardy are in rural counties.
The 19 rural hospitals that shuttered in 2019 were more than any other year since researchers started keeping track – and 2020 was on pace to break that record even before the virus. States that did not expand Medicaid were hardest-hit. Some experts worry that dozens of rural hospitals could close this year if the federal response to the coronavirus does not adequately compensate for lost revenues.
Among the first areas of the Midwest to confirm positive cases, the city’s 25-bed hospital was pushed over capacity as 10 new patients came in each day with COVID-19 symptoms. The closest major urban hospital is 45 miles away in Cincinnati. “I don’t think any hospital can go for long periods of time, keeping up all of the costs we have but with only half of the revenue.”
These centers struggle to recruit nurses, physicians and technicians during the best of times. Coupled with recent layoffs, many cannot backfill staff that get sick. Some hospitals have one, maybe two ventilators. There are shortages of EMS providers, many of whom are volunteers that often are older and more at risk for COVID-19 themselves.
But experts warn some smaller hospitals might have only a couple weeks, or just days cash on hand, if any at all. They're scrambling to figure out how they’ll make payroll next period. Of the federal government’s $100 billion stimulus earmarked for hospitals, the first $30 billion in CARES Act funds was split among providers who accept Medicare. Industry leaders estimate that left between $500,000 to $1 million for every rural hospital eligible.
Federal programs like Medicaid and Medicare pay more for services at Critical Access Hospitals. Those facilities have 25 or fewer beds and serve isolated communities that would otherwise be long drives from emergency care. “Every hospital in the country is facing real financial challenges,” said Dave Gessel, executive vice president of the Utah Hospital Association. “It’s more acute for the rural hospitals because they don’t have the same backup and support networks to keep them in business.”Ozarks Community Hospital spent $350,000 to prepare for COVID-19 – doubling its bed capacity to 50, expanding the isolation ward and obtaining more ventilators.
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