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VOL. 7 | NO. 51 | Saturday, December 13, 2014

Community Hospitals Becoming Endangered Species

By Don Wade

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The state of Mississippi has 110 hospitals and three-fourths of them are, as you might expect, in rural areas.

“And 56 of them have fewer than 50 beds,” said Mendal Kemp, director of the Center for Rural Health at the Mississippi Hospital Association.

Baptist Memorial Hospital-DeSoto stands tall in Southaven. The hospital, along with Methodist Olive Branch Hospital, anchors service in North Mississippi where other smaller hospitals once serviced the region.

(BMHCC)

Baptist Memorial Hospital-DeSoto was never that small. But when it opened in the 1980s, it had 125 beds instead of the 339 it has now. Southaven was a different place then, and Northwest Mississippi had a greater number of smaller, community hospitals.

But in recent years, those community hospitals – whether they’re in Mississippi, Tennessee, North Carolina or New York – are becoming somewhat of an endangered species.

“To be honest, the future for small, stand-alone hospitals is bleak,” said James Huffman, administrator/CEO at Baptist Memorial Hospital-DeSoto. “There used to be a hospital in Coldwater, and it closed probably 10 years ago. The hospital in West Memphis (Crittenden Regional Hospital) closed four months ago.”

Huffman says already they are seeing patients from East Arkansas. Baptist-DeSoto and Methodist Olive Branch Hospital, Kemp says, are “doing well because of population, volume.”

Over the last few years, two different community hospitals closed in Gibson County in West Tennessee and another closed in Brownsville, said Bill Jolley, executive director for the Tennessee Rural Partnership and a vice president of the Tennessee Hospital Association.

The double-whammy of dwindling reimbursements and rising costs contributed to the hospitals’ demise.

“They were certainly factors,” Jolley said. “Primary care is more of a struggle in the rural areas of our state. (Smaller community hospitals) are really having to re-evaluate the services they provide. You could see more hospitals discontinuing certain services.”

And as they do, that leaves large hospitals to fill a void.

Huffman says small community hospitals in Senatobia, Holly Springs and Batesville, for example, offer neither cardiology services nor maternity care. Both are big business for Baptist DeSoto, which delivers about 2,000 babies each year and dispatches its cardiology doctors to affiliate Baptist hospitals in New Albany and Oxford.

Multiple studies, some going back decades, have chronicled the impact on communities when they lose a hospital: reduced per-capita income, a rise in unemployment, decreased access to medical care, and a mean increase in travel time of about 30 minutes to obtain medical care.

In Decatur County, Tenn., Jolley says a tax increase was put in place to help subsidize Decatur County General Hospital, adding, “The community understood the impact of not having that hospital.”

Dr. Kenneth L. Davis, president and CEO of Mount Sinai Health System in New York City, wrote about the vulnerability of stand-alone hospitals in an opinion piece for the Wall Street Journal this fall.

“Hospitals need to broaden the populations they serve, and offer services that cover a larger geographical area,” Davis said, adding, “Hospitals need a large pool to survive any increased medical needs and costly care. The larger net also allows hospitals to learn from different patient populations, such as the elderly, and to make strategic decisions to improve their care.

“Stand-alone hospitals have neither the number of patients to manage the actuarial risk of population management, nor the geographic coverage to serve a large population. Hence the reason for allowing strategic hospital mergers.”

The North Carolina Hospital Association found that rural hospitals had an average of 75.4 percent of Medicaid, Medicare and uninsured patients. Only 21.8 percent of patients were commercially insured.

“Those businesses are very leveraged and they’re very fixed-cost heavy,” Duke Fuqua School of Business health economist Kevin Schulman told North Carolina Health News. “And so they’re vulnerable to even small changes in reimbursement.”

Since Affordable Care Act legislation came on line, probably no change can be categorized as small or insignificant.

“Regulations are increasing and there’s keeping up with high-tech equipment,” Kemp said. “And electronic health record-keeping is an expensive undertaking. Small hospitals can’t get the personnel they need. There are just a lot of challenges. And to compound it, in our state, there is a shortage of health professionals and not just doctors.”

And doctors are opting to do more of their work outside of hospital settings.

“Physicians are practicing on an outpatient basis more – surgeries and everything else,” Kemp said.

All of it makes survival tougher for the small community hospital and, at some level, makes the ever-growing community/suburban/urban hospital more important.

“We’ve got to work hard, just like every hospital,” Huffman said. “We have to be focused on continuing improvement, reducing waste. … The market demands we be more cost-efficient and provide a high quality of care.”

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