From the Desk of Bob McNett….
RURAL HOSPITALS IN OKLAHOMA ARE STRUGGLING FOR SURVIVAL.
Small-town hospitals in Oklahoma and in the south and Midwest parts of the country are seeing their earnings being challenged greatly. Rural hospitals often have a large percentage of their patients covered by Medicare and Medicaid. Cuts in these programs, along with fewer patients covered by higher-paying private insurance, have caused some 50 rural hospitals across the nation to close their doors in the last five years. More were shuttered in the last two years than in the previous decade combined.
Between half and three-fourths of hospitals with fewer than 100 beds lost money from 2009 to 2012, according to federal financial reports.
Nearly 70 percent of at-risk hospitals are in states that have declined to expand Medicaid, the health insurance program for the poor, children, pregnant females and disabled citizens. Expansion of Medicaid, mostly paid for by the federal government in the first few years, would have been required by the original Obama-care law. However, the Supreme Court ruled that the federal government could not require states to expand Medicaid, so many states opted out of the expansion, including Oklahoma.
Fairview, a town west of Oklahoma City, features the Fairview Regional Medical Center as it’s major provider of health care for town and surrounding area residents.
CEO Roger Knak says the problems his hospital is facing are typical of many rural hospitals, focused on Medicare and Medicaid reduction and reimbursement and low numbers of privately insured patients.
Says Knak: “Unfortunately, if you look at the states that did not expand Medicare….and I’m not trying to get political here…. these are the states that have the highest number of hospitals in distress, or in threatened closure.”
With the state budget crisis, the Fairview hospital has been notified to expect Medicaid cuts this year, which will be on top of the 7.5% Medicaid cuts of 2014.
Many doctors are either refusing to see Medicaid patients or limiting the number of these patients that they take, due to low reimbursement rates to doctors for their care. As a result, many Medicaid patients have a difficult time finding a doctor to treat them.
The situation is dire. Rural hospitals have unique challenges, often serving a lower-income, older population than urban facilities. Many of these hospitals have been a bedrock of the smaller towns they are located in. When the hospital closes, physicians leave the area, schools suffer, even businesses and their employees may relocate.
The answer, of course, is more money. With oil prices down, state budgets cratering, there simply is not enough money to go around.
Bob McNett
The McNett Agency
918 294 3712
1 866 497 7119 toll free
918 494 6725 fax