Rural US hospitals are in a world of pain

They provide care for a fifth of America's population, but their numbers are dwindling, due mostly to funding issues.

By Bruce Kennedy Aug 28, 2013 7:26AM

Wheelchair (© Image Source/Getty Images/Getty Images)On Friday, after 42 years in service, Charlton Memorial Hospital in Folkston, Ga., will suspend most of its operations. The 25-bed nonprofit says that while it will continue to have a family practice clinic on the premises, the rest of its services -- including its 24-hour emergency room -- will be shuttered.

Charlton Memorial is the third rural hospital in Georgia to close this year, and part of a trend affecting many small community hospitals across the country. Jimmy Lewis, CEO of HomeTown Health, an organization of rural hospitals in Georgia, told George Health News the closure of Charlton Memorial will force local residents, many of whom are elderly and living below the poverty line, to travel long distances for health care.

Lewis also cited problems with Charlton Memorial that are common to many rural hospitals, including cash shortages, lower state payments, claims disputes with insurers and cuts to indigent care funds ahead of the federal Affordable Care Act.

According to the National Rural Health Association, while 20% of the U.S. population lives outside of America's cities and suburbs, only about 9% to 10% of doctors practice in rural areas. And in many cases, rural hospitals are often major employers in their communities, representing a large portion of the local economy.

Congress created the critical access program in 1997 after hundreds of rural hospitals across the country closed to make sure Americans living in remote areas could still access health care.

But that program has come under criticism for becoming, in the words of Kaiser Health News, "bloated and unwieldy." A report released earlier this month by the Department of Health and Human Service's Office of the Inspector General looked at the Critical Access Hospital (CAH) certification program, meant to ensure rural communities have access to hospital services. Medicare reimburses CAH at 101% of their "reasonable" costs -- rather than by payment system rates or fee schedules.

The study found that nearly two-thirds of CAHs would not meet the location requirements if required to re-enroll -- mostly because most of those facilities were too close together.

If the Centers for Medicare & Medicaid Services "had de-certified CAHs that were 15 or fewer miles from their nearest hospitals in 2011, Medicare and beneficiaries would have saved $449 million," the study said.

But supporters of rural hospitals say the government just doesn't get it.

"We are alarmed by the message this is sending to rural America," Brock Slabach, senior vice president of the National Rural Health Association, told Kaiser Health News. "Using Missouri as an example, roughly 70% of the rural critical access hospitals in that state alone would lose their designation, and face possible closure.  Does that sound rational to anyone living outside of Washington, D.C.?"

More on moneyNOW

Aug 28, 2013 10:06AM

A hospital is a business providing a service.  Many customers are not paying for the services they receive, so the business is closing the unprofitable divisions like the emergency room.

Aug 28, 2013 8:53AM
The hospital managed to get by for the last 42 years.  Now it's closing, just as Obamacare is about to be perpetrated, er, implemented.  Must just be a coincidence.  Wonder how many jobs were lost?  That would have been a nice fact to include in this article, Bruce.

Thanks a lot, Obama, for signing this monstrosity into law.  Thanks a lot, every single one of you scumbag democrats that voted for it.  And a special thank you to that RINO dunce, Susan Collins, who allowed this piece of crap legislation come to a vote in the Senate.  Lest we forget, without her, Obamacare wouldn't have been possible.  Oh, and let's not forget to thank Justice John Roberts, whose bastardization of the US Constitution will haunt us for generations, for upholding this cluster-monkey of a mandate.  Without all of you working together in collusion, er, cooperation, none of this would have been possible.
Aug 28, 2013 8:41AM
Once again, This will happen more and more under Obamacare.
Aug 28, 2013 8:07AM

Because rural people don't need healthcare.


Has the ACA helped anybody?  I am longing for at least one example.

Aug 28, 2013 11:49AM
When will people realize the devastating effect the "Affordable Care Act" is having on ALL aspects of healthcare? I can keep my policy - wrong ! (changed already)  I can keep my doctor-wrong ! (he's had enough of this and retiring early)  My rates won't go up - wrong ! already up 24% this year alone , with MUCH higher co-pays,deductables , and "out of pocket" limits then last year . Get ready for even larger towns shutting down their hospitals , Emergency Rooms etc .  If you think it can't happen , just see the article , it already has begun .  This Obamacare plan is a trainwreck , period !
Aug 28, 2013 11:53AM
Another fine example of the Federal Government destroying things that are working for the American People.
Aug 28, 2013 11:27AM
Propoganda:  If you like your existing insurance plan, you can keep it.

Reality:  Not only will you lose the insurance plan you like, but your local hospital
may shut down, too.

Thanks, Obama.
Aug 28, 2013 12:33PM
"bloated and unwieldy."  Should anyone be surprised? The federal government does not fix problems, they only cause them. This is a state issue.
Aug 28, 2013 11:54AM
Cuts to indigent care funds ahead of affordable care act. There's your affordable care act, you liberal fools. Socialism doesn't work, read your history and get it thru your damn liberal heads.  Barack Hussein Obama's agenda is to destroy our economy and weaken our military. Does his Muslim chosen name not tell you anything? 
Aug 28, 2013 1:17PM

"Using Missouri as an example, roughly 70% of the rural critical access hospitals in that state alone would lose their designation, and face possible closure.  Does that sound rational to anyone living outside of Washington, D.C.?"


Yes, I live in Missouri and I think a 15 mile minimum for CAH funding is perfectly rational, in fact, given rural population densities it is still too low. 


This especially in light of the rural-conservative dominated Missouri state government which turns away federal funding in refusing to participate in the ACA and slashing hundreds of thousands from Medicaid, these in favor of tax breaks for corporations and a drive to cut its already non-progressive income taxes. 


There is a movement towards Swiss style farming by having everyone live in a "city hub" and go to their farms or businesses however far away to work.  The movement wants everyone to live in city hubs and leave the rest of the areas to nature.  


There was also a movement back in the 70s that wanted all lands between the west coast - Rockies and the Mississippi to be a National Park.  Which would remove all settlements to hubs.   This way the buffalo would once again be free to roam as they had 150 years or more ago.   Rural areas will be the last place you will see Hospitals in the future.   The trend is control the people by bundling them in their respective "Hubs".

Aug 28, 2013 3:41PM
More blame for a law that wont be fully implemented until 2018. A lot of deep thinkers on this blog.  Rural hospitals have been in trouble for years. The Critical access program is failing after 16 years when BEFORE 1997, hundreds of rural hospitals had already closed. Georgia is a red state and their politico's do not want to expand Medicaid coverage which would have help keep these places open and get more government funding. It's much easier to blame Obama.
Aug 28, 2013 10:36AM

Obama administration cut backroom deals with the nation’s top drug companies to win support for President Obama’s health care overhaul, threatening them with steeper taxes if they resisted and promising a better financial deal for the industry if they acquiesced

Obama agreed to drop his long-standing support for letting Americans buy cheaper foreign prescription drugs something the pharmaceutical industry vehemently opposed — and the drugmakers promised to mount a public campaign to sell the public on the health care legislation.

Aug 28, 2013 2:31PM
Cuts to indigent care funds ahead of Obama Care.....they will have to travel long distances to get health care.  This hospital has been in existence for 42 years.  What ONE thing is different now.....the AFFORDABLE CARE ACT!!!!!!!  Are you starting to get it now, Obama voters?  You were hoodwinked by  the Democrats and a FRAUD whose name is OBAMA.
Aug 28, 2013 3:23PM
This lies squarely in the lap of republican tea-baggers who say "no" to anything and everything, especially anything that helps small people and doesn't help to make them millionaires! Vote them OUT!
Aug 28, 2013 8:05PM
Obama care is going to make sure that people that are taking advantage of the system are at least putting something back into it. If you go to the hospital with life threatening injuries they have to treat you, by law, whether you can pay or not. These people then don't pay their bills and the hospital has a loss. This happens A LOT. Obama care isn't perfect but it is at least on the path to getting everyone some insurance and making people pay something for their own health instead of making everyone else do it and suffer the consequences.

Aug 28, 2013 4:32PM
The USA is running out of other people's money to spend--other countries are backing off of financing us.  First the rural hospitals will close down, followed by the city/suburban hospitals as the dollar implodes.  Not that it matters as our roads continue to deteriorate and more bridges fall down--you won't be able to get to the hospital anyway.  Better stock up on ginger'll need that and a healthy constitution to fight off whatever ails you in future years.
Aug 29, 2013 12:46PM

Amazingly the article doesn't even mention the OVERWHELMING reason rural (and urban) hospitals are forced to close their doors...........the 16 million illegal immigrants and the 22 million uninsured Americans that the federal government forces the hospitals to treat. This is the real reason and everything else I see commented about is either secondary or bogus.


Yes I am a retired MD. I've preached to congress many times about their "gracious and misguided" laws and regulations.

Aug 29, 2013 9:08AM
We have the same problem in Woonsocket RI. The hospital is bascially bankrupt. All due to people not paying for the services they receive and low reimbursement, People have no insurance. They use the ER for every little thing. Some even refuse to buy insurance from their work place, because it will cost them money. Why pay when you can get it for free. Obama-care will force these moochers to pay something and stop bankrupting our hospital.
Aug 28, 2013 3:41PM
How many hospitals are closing that are not in Georgia, Mississippi, Alabama, Louisiana, Tennessee, Kentucky, Arkansas, Missouri, West Virginia?  How many are closing because there simply is not enough rural population left to justify the existence of a hospital?  How many are closing because no M.D. will service them even on an outreach basis?  How many are closing because their states think someone else should pay for them?  How many are closing because of Obamacare?  The answer to that last one is NONE!  And for you constant Obama bashers who hold him responsible for  everything that happens in the world and all of it is bad, put up or shut up.   I'm sick to death of your constant whining and ignorant blame gaming.
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