A Narrative About Virginia’s Rural Hospitals that Obscures the Facts
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12 responses to “A Narrative About Virginia’s Rural Hospitals that Obscures the Facts”
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Good article. However, the “macro” issue is that rural America is losing people at an absolute rate. The 2010 – 2020 Census timeframe was apparently the first time all of rural America lost population.
Isn’t there a minimum population required to keep a hospital afloat financially?
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Thanks for backing me up. I should have written that.
Some of Virginia’s rural hospitals are quite small. Some of them have closed in the past. Some, acquired as part of bigger systems, have cut back on services to serve as emergency departments with a few other basic services and referral/pick up points for bigger hospitals. That is what Ballad did, for example.
As for absolute numbers of people served however, you are right.
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Critical access hospitals are rural, have 25 or fewer beds, are at least 35 miles from another hospital, provide 24/7 emergency service, and have annual hospital stays of 96 hours or less.
Two of the Virginia hospitals mentioned, Ballad Health’s Dickenson Hospital and Bon Secours Rappahannock General Hospital, are critical access hospitals, and they’re not going anywhere, but for different reasons.
Dickenson County (pop. 14,000) is one of Virginia’s least healthy counties. Out of 133 localities, Dickenson ranks 120th for health outcomes, 129th for health factors, 118th for health behaviors, and 130th for social and economic factors. Dickenson Hospital has 25 beds and according to Ballad’s Needs Assessment, Dickenson’s three priority areas are substance abuse, mental health and lack of transportation.Providing service in that area and others like it was part of the merger deal Va and Tn made.
Last April, Bon Secours broke ground for a 35,000 sq. ft renovation an0d expansion from 8 beds to 10 and “a major overhaul of the emergency department.” The website says they had raised 75% of the $15 million for the renovation.
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Carol:
Thanks for the info. Dickenson County is a great example. The population in that county dropped by 11.2% from 2010 to 2020. The county’s peak population was in 1960. It has lost people every census from 1960 onward.
Unless the population at least stabilizes it seems that health care in Dickenson County will become a bigger and bigger problem.
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Air ambulances… I suppose.
I’m given to think of New London, NH. They qualify as rural with a small town, e.g., a grocery store, a strip mall, handful of restaurants, two gas stations, and a hospital with ER. Save for three cities, the whole State looks like wilderness or water.
New London views their hospital as a jewel and every year they have a week long celebration “Hospital Days” around July 4 geared toward raising money for the hospital.
Is that unique? It’s reminiscent of “Northern Exposure “.
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creating scary narratives out of thin air is the Democrat Party business model
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What counts is not whether these hospitals are technically in the black or not, but how the ownership of these hospitals view the resources tied in up in those facilities. Opportunity costs, not nominal profits, drive resource reallocations. Example: Rural hospital A is in the black, earning $1 m. annually. But the owner could sell that facility and use the resources to expand another facility in the suburbs of a big city and earn $2 m. annually. Hence, while Rural hospital A is technically earning a profit, it is actually losing money from an opportunity cost perspective. Lesson: Being in the black is not synonymous with being profitable. So, many other rural hospitals may be in danger of closing even if in the black.
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Clearly, there is ONLY one solution — we need an organization willing to operate at a nearly complete loss, either cash or economic opportunity, for the sole purpose to promote the general welfare for those in the service area. Now, who could do that? Who could we get with deep pockets with only one mission — keep high quality hospitals open in rural areas?
There is our favorite Uncle, but boy, would Republicans squeal. Time to expand the 7th uniformed service.
Location, location, location.
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It is not about money alone, whatever the source.
These are areas where highly trained medical professionals simply do not wish to live and work.
The federal government brings in a lot of foreign-trained medical professionals on special visas to help, but it is not enough to provide other than emergency services and a few other services at every rural hospital.
See my response to Mr. Wight above.
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Well, when socialized, really socialized like UK, medicine arrives, it will come out of a cornfield.
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Mr. Wight, as I wrote, individual hospitals balance sheets in a large system of hospitals do not reflect the contribution of a single hospital to the profits of the system.
There is a term “capture zone” used by large hospital systems that put emergency rooms and basic services that they designate as hospitals in rural areas to capture the patients there for their larger facilities for more profitable services.
As the population shrinks, so do the number of services offered onsite. Look at Ballad Health. That system was created from two existing systems on either side of the Virginia/Tennessee line by an interstate agreement that sidelined the FTC’s ability to invalidate the merger. Ballad consolidated very expensive services on both sides of the state line.
The most controversial services that were consolidated were Neo-natal intensive care units (NICUs). Those facilities get above average use in Appalachia as an outcome of drug addiction in the mothers.
But capture zones work, the small hospitals take care of about 90% of the need, and the rest are transported to larger, more capable hospitals. That business model has saved most of the remaining rural hospitals in Virginia.
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I’m glad you found CHQPR’s reports on rural hospitals interesting. However, there is nothing mysterious about the source of the information. The data are all available on the RuralHospitals.org website at https://ruralhospitals.chqpr.org/Data5.html along with a description of the sources of the data.
The financial data are essentially identical to what is in the spreadsheet that you posted (although the margins are calculated slightly differently, a positive margin is still a positive margin and vice versa). The methodology used to determine how many hospitals are at risk of closing is described in the report that you read (and it is also described on the website here: https://ruralhospitals.chqpr.org/Solutions.html#The_Need_for_Rapid_Action_to_Prevent_Closures_and_Sustain_Rural_Healthcare .
There are different ways to classify hospitals as rural vs. urban. The Medicare methodology cited in your spreadsheet is somewhat more restrictive than the methodology that is more generally used by the federal government. However, some of the hospitals in the spreadsheet that are classified as “urban” are considered “rural” under all federal definitions, and so the classifications in the spreadsheet are simply wrong. For example, Sentara Halifax is located in South Boston, a community of 8,000 people that is clearly in a rural area, Lewisgale Hospital is located in Low Moor, a town with less than 1,000 population. For both reasons, there are 27 rural hospitals in Virginia, not 20.
Many hospitals that had been losing money prior to 2020 appear profitable in 2020 because of the special federal assistance they received due to the pandemic. Not only will that assistance not continue in the future, but some of it has to be paid back, so 2020 will not be at all representative of a hospital’s true financial viability in the future. For example, Bath Community Hospital is a very small rural hospital that received a large amount of federal funding in 2020, and nearly $4 million of that has to be paid back. (You can see this for yourself in Note 11 of the hospital’s 2020 financial statement: https://bathhospital.org/wp-content/uploads/2021/06/BCH-Financial-Statement-Draft-4-19-1.pdf )
It is true that many of the rural hospitals are owned by large systems, and those systems likely have the resources to keep the hospitals operating if they want to. However, there is no guarantee that they will do so, and there are many examples around the country of large health systems acquiring small hospitals and then later eliminating services and ultimately shutting them down. In many cases, the small hospitals did not want to be acquired in the first place, but they were forced to do so because they could no longer continue operating on their own. It is unfortunate that efforts were not made to help them stay viable before that happened.
The only “agenda” driving this report is to make the public aware of the problems facing healthcare delivery in rural communities and the causes of it. The information is indeed frightening but what is really frightening is that it is based on facts, not “thin air.” I would urge you to read all of the detailed information and analysis available at https://ruralhospitals.chqpr.org/Problems.html If you think any of the specific information is incomplete, inaccurate, or biased in any way, please let me know.
Harold D. Miller
President and CEO
Center for Healthcare Quality and Payment Reform
http://www.CHQPR.org
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