Rural Hospitals Struggle to Stay Open, Adapt to Changes


This article is about tough times for rural hospitals. Many are closing their doors because they can’t make ends meet. One solution to keep doors open are hospital-run Community Health Plans providing revenue for empty hospital beds – a win win business proposition.

OSCEOLA, Mo. — May 1, 2015, 1:57 PM ET

By DAVID A. LIEB Associated Press

After 45 years of providing health care in rural western Missouri, Sac-Osage Hospital is being sold piece by piece.

Ceiling tiles are going for 25 cents, the room doors for an average of less than $4 each, the patient beds for $250 apiece. Soon, the remnants of the hospital that long symbolized the lifeblood of Osceola, population 923, will be torn to the ground.

Sac-Osage is one of a growing number of rural U.S. hospitals closing their doors, citing a complex combination of changing demographics, medical practices, management decisions and federal policies that have put more financial pressure on facilities that sometimes average only a few in-patients a day.

“Money just kept drying up,” said Chris Smiley, a former operating room nurse who was the last chief executive of Sac-Osage and is now overseeing its liquidation.

A total of 50 hospitals in the rural U.S. have closed since 2010, and the pace has been accelerating, with more closures in the past two years than in the previous 10 years combined, according to the National Rural Health Association. That could be just the beginning of what some health care analysts fear will be a crisis.

An additional 283 rural hospitals in 39 states are vulnerable to shutting down, and 35 percent of rural hospitals are operating at a loss, according to iVantage Health Analytics, a Portland, Maine-based firm that works with hospitals.

Most of the rural hospital closures so far have occurred in the South and Midwest. Of those at risk, nearly 70 percent are in states that have declined to expand Medicaid coverage under the federal Affordable Care Act, although some experts are hesitant to draw a cause-and-effect correlation.

Big city hospitals have been closing at about the same rate as rural ones during the past five years, but an abundance of alternatives in most major metropolitan areas typically reduces the effect on patients. When a rural hospital closes, people may have to travel dozens of miles to reach the nearest hospital, an inconvenience that potentially is a matter of life or death.

When 18-month-old Edith Gonzalez choked on a grape in August 2013, her parents rushed to Shelby Regional Medical Center in their hometown of Center, Texas, unaware that the hospital had closed several weeks earlier. Their daughter was dead by the time an ambulance had taken her to the next nearest hospital, more than 45 minutes later.

In rural North Carolina last summer, 48-year-old Portia Gibbs died from cardiac arrest after waiting 90 minutes for a medical helicopter to arrive. She could have been at a hospital in less than half that time, had not the Vidant Pungo Hospital in Belhaven closed just six days earlier.

Her death prompted Belhaven’s mayor to walk 273 miles to the nation’s capital in an attempt to raise awareness about the plight of rural hospitals. Mayor Adam O’Neal plans to lead a similar march June 1 with supporters from at least 41 states.

The city now is trying to acquire the old hospital through eminent domain and is seeking $6 million in federal loans to re-open it. Since Gibbs’ death, O’Neal said, several others have died before they could make it to farther-away hospitals, including a 16-year-old boy hurt in a farming accident in April.

“We have people needlessly dying,” O’Neal said.