Hospitals shut down where Medicaid unexpanded

Some people must travel up to 40 miles to get care, causing lethal delays, according to an advocacy group for facilities that treat uninsured and low-income patients.

By MSNMoney partner Nov 25, 2013 2:46PM

By Toluse Olorunnipa, Bloomberg


Pam Renshaw had just crashed her four-wheeler into a bonfire in rural Folkston, Georgia, and her skin was getting seared in the flames. Her boyfriend, Billy Chavis, pulled her away and struggled to dial 911 before driving her to the nearest place he could think of for medical attention: an ambulance station more than 20 miles away.


The local public hospital, 9 miles from the crash, had closed six weeks earlier because of budget shortfalls resulting from Obamacare and Georgia's decision not to expand Medicaid. The ambulances Chavis sought were taking other patients to the next closest hospital. It took two hours before Renshaw, in pain from second- and third-degree burns on almost half her body, was flown to a hospital in Florida.


At least five public hospitals closed this year and many more are scaling back services, mostly in states where Medicaid wasn't expanded. Patients in areas with shuttered hospitals must travel as far as 40 miles (64 kilometers) to get care, causing delays that can result in lethal consequences, said Bruce Siegel, chief executive officer of America's Essential Hospitals, a Washington-based advocacy group for facilities that treat large numbers of uninsured or low-income patients.


"Everyone in a community will be affected," Siegel said. "We could see the end of life-saving services, and patients would bear the brunt."


Hospitals have dismissed at least 5,000 employees across the country since June, mostly in states that haven't expanded the joint state-federal Medicaid health program for the poor as anticipated under the U.S. health overhaul known as Obamacare. Hospitals like the Cleveland Clinic in Ohio, Vanderbilt University Medical Center in Tennessee and Indiana University Health are among providers seeking cost savings in areas such as cancer treatment, mental health and infant care.

Medicaid Payments

The Obama administration anticipated that cuts in subsidies for treating large numbers of people who can't pay for medical care would be balanced by more low-income patients being covered by Medicaid. A U.S. Supreme Court ruling last year allowed states to decide whether to expand Medicaid to individuals making as much as 133 percent of the federal poverty level. Half have said they would.


The hospital closures and service reductions are a setback for President Barack Obama's Patient Protection and Affordable Care Act. The insurance marketplace, the core of the law, has been marred by flaws in the federal website, and Obama has apologized that the act resulted in Americans losing policies that don't meet coverage requirements.


Obama proposed delaying for a year the subsidy cuts for hospitals to give states more time to expand Medicaid. Congress didn't go along with his proposal.

Blame States

Joanne Peters, a spokeswoman for the U.S. Health and Human Services Department, said governors who chose not to expand Medicaid are to blame for the hospital closures. The administration "strongly encourages" states to expand Medicaid, which would "dramatically reduce the amount of unpaid bills that hospitals are left with," Peters said in an e-mail.


Georgia's Republican Governor, Nathan Deal, has said the state can't afford to expand Medicaid. Even though the federal government says it will initially cover the costs, the price tag will be too high in the future, he said.


The Obama administration shouldn't have cut subsidies to hospitals that treat the uninsured, said Brian Robinson, a spokesman for Deal.


"There are numerous ways to go that don't include a huge new burden on states, who unlike Uncle Sam can't print money or run a deficit," Robinson said.

Difficult Choices

Hospitals that treat the uninsured where Medicaid isn't expanding are being forced to decide whether to close or eliminate care for "the people who use the transplant services, the people who need to be flown to the trauma center, or the infants who need the neonatal intensive care unit," said Siegel, of the hospital group.


Patients who don't get medical treatment within the first hour after a heart attack, stroke or certain other traumas are more likely to suffer long-term ailments or death, medical research has found. Those who live in rural communities face the greatest danger, said Ashish Jha, who teaches health policy at the Harvard School of Public Health in Boston.


"In an urban city if a hospital closes, there's probably another one within 10 minutes," he said. "In a rural community, that's not true. So the consequences of shutting down are much bigger."


Hospitals that treat a large number of uninsured will lose about $18.1 billion in Medicaid subsidies through 2020 under Obamacare, and as much as $22 billion in Medicare subsidies through 2019.

Bond Market


Weakening hospital finances in states where Medicaid isn't being expanded is reflected in the $3.7 trillion municipal-debt market. Investors are demanding higher interest rates on bonds sold by hospital networks in those states.


Securities sold for Sparrow Health System in Michigan, which voted to expand Medicaid in August, traded on Nov. 13 at an average yield that was 1.3 percentage points more than benchmark AAA munis, data compiled by Bloomberg show. The spread on the debt, which matures in 2036 and is rated A1 by Moody's, has narrowed by 15 percent in since Aug. 5.


During the same period, the spread on tax-free bonds issued for the Children's Medical Center of Dallas increased about 3 percent, the data show. The securities, due in 2039, are rated Aa3 by Moody's, one step higher than the Michigan bonds.

Hospital Closures

Three of the hospitals that closed this year were in Georgia. The others were in North Carolina and Virginia. Those hospitals, and more than a dozen others that have dismissed workers this year, cited the reduced federal subsidies and lack of Medicaid expansion.


As many as 15 more rural hospitals in Georgia may shut "within months" due to revenue pressures, said Jimmy Lewis, CEO of HomeTown Health LLC, a Cumming, Georgia-based network of rural hospitals.


In states like Tennessee, which hasn't decided whether to expand Medicaid, hospitals are preparing to scale back. Almost half of the 61 rural hospitals in the state may face "major cuts or closure" without Medicaid expansion, according to Tennessee Justice Center, a Nashville-based health-care advocacy group.


The four-wheeler accident happened in southeastern Georgia, just north of the Florida border. The nearby hospital, Charlton Memorial, closed in August after 40 years. While the facility had only 25 beds, it boasted of a 24-hour emergency room.

Seeking Help


Renshaw, 51, an uninsured real estate agent, was engulfed in flames and trapped beneath her four-wheeler after it crashed on Oct. 14.


Chavis, who was working nearby, pulled her out of the fire and tried to call 911, he said. There was no answer, and he said he isn't certain the call went through.


"I was in a mess," he said. "My hands were hurting from the fire."


Chavis carried Renshaw into his truck and sped down a dirt road and past the closed hospital.


When Chavis arrived at the ambulance station, no one was there. He said he drove across the street to the sheriff's office and he was told both ambulances were 30 miles away, transporting patients. Charlton County administrator Al Crace didn't return a phone call seeking comment on the ambulances.


Renshaw was eventually flown to Shands Hospital at the University of Florida in Gainesville, where she arrived in critical condition, said David Mozingo, director of the facility's burn center, in an e-mail. He didn't respond to questions about the impact of the delay getting to a hospital.


Renshaw has had seven skin-grafting surgeries and will probably need five more, Mozingo said. She has suffered multiple infections, a common complication in such injuries, he said.


Renshaw's sister, Yvonne Hallman, said she keeps thinking about whether Renshaw would have suffered less had there been a closer hospital.


"I wonder if the time delay hasn't caused some of her problems," Hallman said. "If the hospital had been there, they would have had some solution to pour on her to clean her up quicker." 

More from Bloomberg

Nov 25, 2013 3:03PM
Takeaways from this article:

1) Don't live in the boondocks. There are no jobs. There are no services. Or if you do, understand what you are getting into.
2) Don't ride your four-wheeler in circles around a bonfire.
Nov 25, 2013 3:23PM
Another joke on America.. one has to laugh when the DHS blames the states.. always someone else is blamed, by the way note that neither obama nor the dems use the word obamacare, now it is the ACA.  The answer to this medicaid problem is not pick up and go to the city, many elderly and ill people cannot  afford to move.. the answer is to correct the problem and the hundreds more problems which will occur as a result of obamacare...
Nov 25, 2013 3:01PM
Lets just send some more of our tax dollars overseas.... They need the help. I think American's are getting very tired of it.
Nov 25, 2013 4:14PM
how exactly could they have budget shortfalls from something that hasn't even started nor takes effect until January of 2014?
Nov 25, 2013 5:00PM
avatar you mean congress wouldn't go along with it? The house asked for delays multiple times. Oblamo direct quote "I will not negotiate". So what do you mean Obama offered. Why do you insist on only telling half the story?
Nov 25, 2013 4:58PM


Nov 25, 2013 3:32PM
CLAP     CLAP       CLAP       CLAP

 --- Health Care for All !

May the POTUS and his horse walk down an alley in downtown Baltimore crawling with hoody teens looking for something to do (w/o their SS escort).

Then -- maybe we can get on with "knocking out" our problems.

Nov 25, 2013 5:16PM
How's that hope and change looking?????
Nov 25, 2013 4:43PM
I live in a red state that didn't expand Medicaid. All of our shysters, free loaders and parasite democrats are moving to blue states. It seems that the blue states will be getting more blue and the red states more red with the exodous of more shysters to the blue states.
Nov 25, 2013 4:56PM
Well if you can't get enough freebies in one location/state, move to another that is freer with the taxpayer's money, no problem. I am sure we will sorely miss your contribution. Maybe you can start a hospital there.

But it does seem illogical to me that the same people that want ever entitlements, now another one according to MSN, a hospital nearby your house in the boondocks if you drive drunkenly into a fire, also want more people on the dole. These same remote,  uninsured,, bad drivers, always vote for liberal politicians that support amnesty and relaxation of legal residence status which will expand the number on the dole.  After all, there is a limit to what rationale people are willing to "share" from the fruits of their labor with those that refuse to labor at all.

Oh well, I guess I never understood spending your life as a dependent, so it make sense I can not understand that political and voting logic either, but there are always "news" outlets that pander to those that love these illogical rants, as MSN, about folks in the boondocks not having a hospital nearby.

Nov 25, 2013 5:21PM

Obama proposed delaying for a year the subsidy cuts for hospitals to give states more time to expand Medicaid. Congress didn't go along with his proposal.


Why doesn't Obama just decree it like he did with the delay of the business and individual mandates.  He doesn't obey his own laws.

Nov 25, 2013 4:54PM
It's not just a medicaid issue.  If you have Tricare ( the insurance program for active duty and retired military members and thier familites) you may have to go that far or even further.  That's because Doctors are refusing to take Tricare patients since the reimbursements had decreased significantly over the past few years.  We have to dirve at least 35 miles to find a doctor -- and it took 5 years to find one that would accept our insurance.  Now the President is recommending further cuts thatt will impact the amount that veterans have to pay out of pocket for medications and doctors visits.  Many if the issues faced by vets these days are caused by years of service in areas that were
Nov 25, 2013 5:51PM
Looks like the next logical step for the Obama administration is a ban on bonfires and 4-wheelers!
Nov 25, 2013 7:38PM

David Axelrod or one of his minions must have authored this piece. The fact is the expansion of Medicaid is causing hospitals to close. First because the reimbursement rates are way to low and do not cover operating costs and second, they (Medicaid)  is very late in making payments. You can't keep the doors open with out revenues, a point Liberals and "progressives " often forget.

Nov 25, 2013 7:43PM

85% of Americans were happy with their HEALTHCARE

15% of Americans had no Healthcare, but were never turned away

We just flipped the entire system on it's head for 15%,,,and if you believe that you are 
Nov 25, 2013 6:33PM
This is the dumbest article I have ever read.  How were they expecting hospital to stay open treating MORE people for LESS money per person.  Medicine is not like m****ducing widgets.  More patients for less money per patient means the hospitals would lose more money.  Then they would expect someone, the taxpayer, to subsidize their losing effort.  This is not micro or macro economics, just common sense.
Nov 25, 2013 6:26PM
Not sure about this attack on certain State's Medicaid problems, but I do know that my daughter was one of the lucky ( Suckers! ) who was able to enroll and now learns that her local hospital ( Auburn, In.) is one of the hospitals dropped from the approved list !
Nov 25, 2013 8:08PM
The money is in Government management which is quite an army of new government experts like the IRS who are all still trying to figure out what the ACA is and concurrently fix it but they are finding the web is getting thicker and the walls are closing in around them - because it's hard to make a stone boat float.
Nov 25, 2013 7:36PM
By:  Monday September 23, 2013 9:40 am

Obama on the 2008 campaign trail

I find this detail from a new Politico article worth highlighting. It is more verification that the Obama 2008 campaign messaging around health care reform was based on lies and active deception. From :

At the advice of his political advisers,Obama sought to undercut Clinton by accusing her of pushing for an individual mandate — an idea borrowed from Republicans that polled poorly with independents and conservative Democrats in critical battlegrounds like Pennsylvania and Ohio.

Aides say Obama was simply looking for any way to differentiate himself from an opponent whose basic policy positions were indistinguishable from his own. After Clinton dropped out in June 2008, Obama was privately telling his staff that any health care reform he proposed would most likely include a mandate.

The same dynamic played out in the general election. John McCain’s plan to tax some employer provided insurance was the basis for one of Obama most frequently run attack ads, but Obama then fought to make sure an excise tax on employer provide insurance was one of the main funding sources in the Affordable Care Act.

Given this history it still amazes me some Democrats are surprised Obamacare become very unpopular or think its unpopularity is completely the GOP’s fault.

Obama directly lied to the American people about his health care plan for political gain. He then insisted his law include the provisions his own polling showed were very unpopular, which had made great political weapons in the attack ads he ran. Provision his campaign helped make even more popular by first actively campaigning against them.

The result was a bill people couldn’t trust that contained several unpopular provisions and broken promises. Yet despite all this Democrats were still genuinely shocked it didn’t immediately become popular.

Nov 25, 2013 7:29PM
Hey  Old Grouch             Here ya go,,,,,,Next time do you own research,,,,,,and by the way

90 million AMERICANS are gonna be pissed off in less than 1 year,,,,they did not want it,,,,but they got it​tml​lthPlan_061709.pdf

(Reuters) - President  would veto a bill sponsored by a Republican congressman that would allow insurers to offer healthcare plans slated to be canceled because they do not meet the new U.S. healthcare law's standards, the White House said on Thursday.

The veto threat came hours after Obama, under fire for the botched roll-out of his signature domestic policy achievement, said health insurers could extend by at least one year policies that were due to be canceled because they do not comply with new minimum requirements.

The White House has said previously that the bill, sponsored by Representative Fred Upton of Michigan, would undermine the law known as Obamacare because it would allow plans that had been canceled to be sold to anyone, not just people who wanted to renew their existing plans.

The bill "rolls back the progress made by allowing insurers to continue to sell new plans that deploy practices such as not offering coverage for people with pre-existing conditions, charging women more than men, and continuing yearly caps on the amount of care that enrollees receive," the White House said in a statement on Thursday.

"The administration supports policies that allow people to keep the health plans that they have. But, policies that reverse the progress made to extend quality, affordable coverage to millions of uninsured, hard-working, middle-class families are not the solution," it said.

Upton is the chair of the House of Representatives' energy and commerce committee and a longtime critic of Obamacare.

Democrats and Republicans have expressed anger over the prospect of several million Americans having their policies canceled. Obama's proposed fix on Thursday was aimed at addressing one of a myriad of problems associated with the law since the glitchy website went online last month.

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