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When Hospitals Close in Appalachia, the Costs Are Far-reaching

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Natalie Boone is the director of emergency services for Clay County, Tennessee. Photo: Taylor Sisk/100 Days in Appalachia

At 7 a.m. on March 1, Cumberland River Hospital ceased providing care to the citizens of Clay County, Tennessee. As the county’s director of emergency services, Natalie Boone will shoulder the consequences. As a community member, she’ll grieve.

“There are so many people in this county walking around today…because of this hospital right up here,” Boone said, seated in her office in the county seat of Celina.

Cumberland River is a critical access hospital and has served the community since 1965. It offered a limited number of medical procedures, but, Boone said, in emergencies patients could be stabilized there before they were moved on to a larger facility.

But amid rising health care costs, Cumberland River has struggled financially, and now Clay County, which rests on the Kentucky border of north-central Tennessee, will find itself in a growing cohort of rural communities across the nation that have lost their local hospital.

Cuberland River Hospital in Celine, Tennessee, closed on March 1, 2019. Photo: Taylor Sisk/100 Days in Appalachia

‘Nail in the Coffin’

According to a report released in February by consulting firm Navigant, one in five rural hospitals are at high risk of closure due to financial hardship. The hardest-hit states are in the South and Midwest.

The Navigant report found a number of Appalachian states to be in particular peril. According to their analysis, nine of 41 rural hospitals in Pennsylvania are at high risk of closure, 10 of 27 in West Virginia, 21 of 42 in Alabama, 26 of 63 in Georgia and 31 of 64 in Mississippi.

Researchers also determined that nearly two-thirds of at-risk rural hospitals are considered “highly essential to the health and economic well-being of their communities.” Many are among the top employers in those communities.

That’s true for Clay County. Its economy was once largely dependent on Oshkosh, a children’s clothing brand that at one time had three plants here; it exited in the 1990s. The county, which has a population a shade under 8,000, never really has recovered from that. The two largest employers have been the school system and the hospital. But with the closure of Cumberland River, 146 people will lose their jobs, the majority of those full-time.

“My fear is that this is just the final nail in the coffin for this town,” Boone said. She recognizes that losing the hospital dims the county’s chances of attracting new businesses and puts a strain on the existing ones.

“There’s not going to be the calling in of seven or eight orders to these local restaurants every day for lunch and for supper. That’s gone,” she said. “That’s a hundred full-time positions that are going to be lost, that are going to cost tax dollars.”

The economy of downtown Celina, Tennessee, will likely be impacted by the closure of the county’s only hospital. Photo: Taylor Sisk/100 Days in Appalachia

But the hospital’s closure means much more to Boone than the loss of income. It’s also about care; more specifically, emergency care. Boone said she expects 911 call times in the county to double. She has but two ambulances.

“Where this really incites fear and concern for me as an EMS director is that it means that our time without an ambulance available in this county for these citizens is going to drastically increase,” she said.

While acknowledging that hospital care is available within 20 to 30 minutes for many, but not all, county residents, she stressed that 20 minutes can often be the difference between life and death.

And, she added, she anticipates an increase in calls, because there will be people “who were OK to drive 10 minutes to the local hospital but are not going to feel comfortable driving an additional 20 minutes.”

‘Older, Poorer, Sicker’

A 2016 study by iVantage Health Analytics found that more than half of rural hospitals at risk of closure are in communities “that can least afford to lose access to care.”

“We’re dealing with populations that are vulnerable. Statistics comparing rural to urban find that, in summary, they’re older, poorer and sicker,” Brock Slabach, senior vice president for members services at the National Rural Health Association, said of assessing the future of rural hospitals.

Slabach cites income level as the single best predictor of the health status of a community.

“If you want to find a healthy community,” he said, “look at average incomes that are way above the national average.” The inverse is likewise true.

According to the U.S. Census Bureau’s American Community Survey, more than 20 percent of Clay County residents live below the poverty line. The statewide average in Tennessee is 17.6.

The median household income in Clay County is $30,801 compared with Tennessee’s overall $48,708. The national median household income is $57,652.

A range of factors play a role in rural hospital closures. Among them: declining populations, difficulty in attracting health care professionals to rural communities and an inability to raise sufficient capital that would allow a hospital to better compete. There’s a substantial gap between profit margins of urban and rural hospitals, a gap that in 2013 began to widen much more quickly than the prior few years.

Communication, Collaboration

There are cases of shuttered rural hospitals being reopened, but usually in different iterations, focused on the community’s most urgent needs, perhaps refurbishing to provide assisted living or rehab services.

In such cases, communication and due diligence can help smooth the transition. Northeast Georgia Health System, for example, has worked to solicit input from the community after it took ownership of Chestatee Regional Hospital in Dahlonega, Georgia.

The hospital ceased operations on July 26 of last year in the midst of the previous owner’s legal issues. It was the seventh rural hospital to close in the state since 2010. NGHS, based in nearby Gainesville, took ownership of the property, sold it to the University of Georgia’s Board of Regents, then leased it back.

After Chestatee Regional’s closure, NGHS hired a consulting firm to conduct one-on-one interviews with key stakeholders in the community to help determine the most appropriate path forward. They also hosted a series of focus groups with health care professionals – including former Chestatee Regional employees – and others.

“We want people to have the option to stay close to home for care, and then visit a larger hospital…when they need more advanced treatment options that aren’t available locally,” said Louis Smith, NGHS’s president of system acute and post-acute operations.

Smith said NGHS is investing in new technology to help improve care for those who live in rural areas. He cited its electronic health record, which receives information from providers outside the NGHS system through a regional health care information exchange called HealtheConnection.

“We’re working to combine data from those two systems and analyze it for trends, which will allow us to better understand which health issues or conditions have the biggest impact on individual communities,” Smith said. “Once those are identified, we can collaborate with our regional partners and invest in services to meet those needs.”

A spokesperson has said that NGHS’ hope is to re-establish emergency services, perhaps by late summer, while continuing to examine longer-term solutions.

Looking for Solutions

Researchers say there are ways that the challenges plaguing rural hospitals can be mitigated. Expanding Medicaid under the Affordable Care Act is one of them.

Under the ACA’s Medicaid expansion provisions, states have access to substantial federal funding to provide health care coverage to more people. Hospitals then have fewer patients with no means of payment for their care. Among Appalachian states, six have thus far declined that funding: Alabama, Georgia, Mississippi, North Carolina, South Carolina and Tennessee.

A January 2018 report in the journal Health Affairs stated that “Medicaid expansion was associated with improved hospital financial performance and substantially lower likelihoods of closure, especially in rural markets and counties with large numbers of uninsured adults before Medicaid expansion.”

And according to researchers at Northwestern’s Kellogg School of Management, hospitals in Medicaid-expansion states saved $6.2 billion in uncompensated care, with the biggest savings in states with the highest percentage of low-income and uninsured patients.

Medicaid expansion is certainly a consideration in the fiscal health of rural hospitals. But no one sees it as a cure-all.

Other potential solutions suggested in the above-mentioned Navigant report include advancing legislation around telehealth reimbursement and the passage of the Rural Emergency Acute Care Hospital Act, which would introduce a new Medicare classification allowing rural hospitals to provide emergency and outpatient care without having to maintain inpatient services. 

Brock Slabach says Appalachian states could look to an innovative program already in practice in the region. The Pennsylvania Rural Health Model, a federal Centers for Medicare & Medicaid Services program, could provide “a wholesale kind of change to the structure of how health care is financed,” Slobach said. The program provides that a fixed amount is paid for all hospital-based services, with rural hospitals committing to redesigning delivery of care to better meet their communities’ needs.

Health care is local, Slabach asserts, and communities must get creative.

“I think that the hospital administrator of the future, and the person in charge of health care in most communities, is going to be a community organizer,” he said. “They’re going to be organizing resources across the continuum, basically moving as much as they can out of the hospital and into the home and the community to try to keep patients healthy.”

“I think there’s a lot of exciting things on the horizon,” Slabach continued. “I just hope that we can get the political courage of our Congress to focus on something other than our southern border and maybe put their energies toward some of these solutions.”

Desperation is the mother of invention, he avowed. “I think we’re seeing a lot of pain being expressed across the country, and I think more and more legislators are starting to become aware of that and are starting to respond.

“That’s the good news. I just hope it’s not too little too late.”

Lives Saved

In February, Natalie Boone attended the funeral of 28-year-old Kyle Fisher, a paramedic, a colleague and friend. Fisher went into cardiac arrest after an illness. Clay County EMTs arrived, administered 20 minutes of CPR, got a pulse and carried him to Cumberland River Hospital, where, after two and a half hours, he was stabilized.  

Fisher was taken to Vanderbilt University’s cardiovascular intensive care unit in Nashville. He died later that week. But the efforts were not in vain.

“His family has said repeatedly that because of this local hospital and our EMS, we were able to get him to be where he needed to be, and we allowed him to fulfill that final wish,” Boone said. Fisher was an organ donor.

According to Vanderbilt, Fisher’s organs saved six lives, and dozens more will benefit from his body tissue.

“If we didn’t have this local hospital,” Boone attested, “that wouldn’t have been an option.”

“We are not the first community to lose their hospital, and, unfortunately, we won’t be the last,” she said. People shouldn’t suffer “simply because they choose to live in a rural area. They don’t want to live in a big city, and they’re punished for that.

“There has got to be a solution.”