Healthcare groups focus on education

Coming up toward the end of this month is the annual Rural Hospital Leadership Conference, organized by the Washington State Hospital Association and the Association of Washington Public Hospital Districts.

While these conferences are always densely packed with informative lectures and interactive sessions, this year may be especially important, because the Washington Rural Health Access Preservation (WRHAP) group hopes to make a presentation to some of the key state legislators on the House and Senate Committees dealing with healthcare.

Legislative support will be crucial for meaningful changes in the way rural healthcare facilities are compensated by Medicaid, which in turn would, we hope, influence Medicare payments as well.

Why is that important? Because small rural healthcare facilities across the state and nationwide are in increasingly dire financial straits.

A 2016 study showed that nationwide about one-third of all rural hospitals are at risk of closure, in many cases “extreme risk”. That is not conjecture; it is fact.

America has been losing rural hospitals to finances forced closure at a steady rate of about one hospital closing every five weeks, year in and year out, for decades now, and the trend is accelerating (the rural-hospital closure rate was six times higher in 2015 than in 2010).

A hallmark of small rural hospitals is that they serve communities that are older and less affluent than national norms. As a consequence, for the typical rural hospital District, such as EARH, the patient base is roughly two-thirds Medicare or Medicaid.

Obviously, then, how those payers reimburse rural districts will largely determine those hospitals’ financial states.

And they do not reimburse equitably. The federal category of “Critical Access Hospital” was designed by Congress to help stop the bleeding. Its key provision is that CAHs get reimbursed at 101 percent of their costs for providing services to Medicare and Medicaid patients.

Supposedly, such “cost-plus” payments assure financial viability. But the flaw is that the “costs” used to reckon the reimbursements do not include indirect components, so in reality rural hospitals are taking a loss on each and every Medicare or Medicaid patient they see.

Moreover, the “sequester” of some years ago cut the nominal rate from 101 percent to 99 percent. In short: the law guarantees that CAHs take a loss on about two-thirds of their patient base.

Only two things have kept virtually every rural hospital afloat at all: private, non-governmental insurers and taxation. Most rural communities tax themselves, often heavily, in support of their local hospitals, because they know how devastating loss of a regional hospital and emergency room would be.

Obviously, the system urgently needs fixing, or very soon a lot more rural hospitals will be closing.

The WRHAP group has been working arduously for three years now developing a detailed, practical, fair system for compensating small nonprofit rural hospitals. But we go nowhere if we cannot line up legislative support for that plan.

We need an educational push, and that is what we hope we can achieve at the upcoming conference. Wish us luck.