Column: Good news and bad news abound for East Adams Rural Healthcare

The good news is that it looks like your District will have ended 2018 with a six-digit profit.

We have to say “looks like” because the final audit adjustments are not completed, but that seems to be what the number will end up being. That is great news, because a number of other Public Hospital Districts similar to ours are still losing money.

That takes us to the less-than-good news. The state Health Care Authority continues to press their proposed new “Alternate Payment Model,” which would drastically change how about half the hospitals in the state, including your District, get paid. The HCA itself can only change Medicaid payments, but they plan and expect to persuade other payors, from Medicare to most or all private insurers, to use their method.

The “about half” is 52 hospitals out of 105; those are hospitals that the HCA has classed as “rural.” In any rational view, there are certainly not 52 “rural” hospitals in this state; one method of counting suggests 39. But the HCA is apparently using some very broad brush with which to paint their vision of “rural.”

The problem is simple: hospitals have, for decades now, been getting paid less by Medicare and Medicaid than it actually costs the hospitals to treat those patients. That is a problem for all hospitals in the nation, but it hits rural hospitals especially hard because for the typical rural hospital, Medicare and Medicaid patients combined are about two-thirds of their patient base. No business—and like it or not, even a public hospital is a business—can survive forever if it necessarily loses money on two-thirds of its customers. Small rural hospitals have to rely on private-insurance payments to help balance the books, but that is never enough. The rest comes from local taxes: community support.

But even that is not enough. Several small rural hospitals in the state are at real risk of closing, possibly even this year. And what the HCA is proposing would in essence “lock in” those losses by using recent historical financial data as the basis for future payments. There are so many things wrong with the HCA’s notions that a full explanation would fill this entire newspaper, and more. The problem we Districts face is that the legislature by and large does not at all understand the nature of rural healthcare.

We here are fortunate, in that our legislators—Mark Schoesler, Joe Schmick, and Mary Dye—are well tuned in, and have been very supportive. Recently, our CEO, Gary Bostrom, our Chief Nursing Officer, Jennifer Pepperd, and I traveled to Olympia as part of a statewide awareness day, and met with those legislators. As I said, they have been and are very supportive, but the majority of legislators are from urban and suburban areas, and it is they who need educating on the dire financial problems small rural facilities face.

We can only hope our legislators can be successful in that educating. If anything like the

HCA’s current proposals is adopted, the future of rural health care in Washington will be bleak indeed.