Health Care

1 in 3 rural Kansas hospitals at risk of closing in study

Mercy Hospital Independence in Independence, Kansas, Oct. 1, 2015.
Mercy Hospital Independence in Independence, Kansas, Oct. 1, 2015. File photo

A third of Kansas’ rural hospitals are now at risk of closure, according to a national study released Tuesday.

The for-profit research group iVantage Health Analytics, based in Maine, released the study, which it said it paid for. It does not identify hospitals by name to avoid worsening those hospitals’ financial problems.

In Kansas, the report found that 31 of the state’s 107 rural hospitals have at least some characteristics of hospitals that have closed. That’s up from 17 at-risk hospitals reported in the 2015 report.

“I’m extremely concerned but not surprised,” said Brock Slabach, a senior vice president at the National Rural Health Association, which is based in Leawood.

Nationally, 210 hospitals are at a high risk of closing and 463 are at a lower risk of closing, according to the iVantage study.

The report found the number of at-risk rural hospitals is higher than previously thought and that half of those at risk serve disproportionately poorer, sicker and older populations.

“It’s not just about hospitals,” said Michael Topchik, a senior vice president at iVantage. “What we care about is the people being served by those hospitals.”

This is the sixth year iVantage released a report about at-risk rural hospitals. Its 2015 report showed the situation was grim.

The 2016 report shows it’s now worse.

Topchik pegged two reasons for the worsened outlook: a deteriorating situation for hospitals, and more robust data for the 2016 report.

iVantage studied characteristics of 60 rural hospitals that have closed since 2010 for its most recent report; 40 hospitals were part of its 2015 report.

The total number of hospital closures since 2010 now sits at 67, with the most recent in Sayre, Okla., on Monday. Mercy Hospital in Independence closed in October.

For the first time, iVantage studied a correlation with vulnerable populations and vulnerable communities.

The researchers found more than half of the vulnerable rural hospitals are also serving the most vulnerable communities – those with older, sicker, poorer and less educated residents.

“If these hospitals were to close, the communities which can least afford it would lose access to care and the health disparities would worsen,” the report stated.

About a third of the nation’s rural hospitals are at risk of closing. Kansas is close to the national average. Mississippi has the highest risk of hospital closures.

The problem is generally worse in states like Kansas that did not expand Medicaid, according to the report. Medicaid is a federally funded insurance program for people with disabilities or low incomes.

The number of people without insurance is typically higher in states that did not expand Medicaid, so rural hospitals receive less money in reimbursements from Medicaid and donate more care to patients who can’t pay.

“There definitely is a correlation between states that have not expanded Medicaid and those hospitals that have closed, however there is not causation,” said Slabach, of the National Rural Health Association.

A coalition of health organizations is pushing for Medicaid expansion in Kansas. The topic gained attention following the Independence hospital closure.

But it looks unlikely the state will expand Medicaid, given Gov. Sam Brownback’s opposition to the expansion.

Opposition to Medicaid expansion in Kansas and in other parts of the country largely stems from its ties to the Affordable Care Act. The act included Medicaid expansion as part of its plan to make health care affordable.

Cuts to Medicare reimbursements

The report links the decline of rural hospitals to reduced federal reimbursements over the past few years.

Those cuts include 2 percent cuts to some Medicare reimbursements, which started as part of a series of budget cuts in 2013. Medicare is a state- and federally funded insurance program for adults over 65 years old.

Hospitals with less revenue from Medicare reimbursements might be able to better absorb the cuts than struggling rural hospitals that rely heavily on the funds.

Slabach said Medicare reimbursements often account for 80 percent of the revenue in rural hospitals.

“It’s disproportionately impacting rural providers much more,” Slabach said.

The National Rural Health Association held a daylong forum Tuesday in Washington, D.C., in hopes to convince Congress to pass a Save Rural Hospitals Act.

“This is an important problem that needs to be solved and we need to set it as a priority,” Slabach said, referring to the security of rural hospitals.

Among several changes, the act would reinstate money to rural hospitals cut by the federal government.

That includes the 2 percent sequestration and reimbursements for what’s called “bad debt.”

Bad debt refers to unpaid medical bills by Medicare recipients who have to pay a portion of their medical costs. When patients don’t pay their portion of a bill, the federal government reimburses part of the debt to the hospital. The government cut back on those reimbursements in 2013.

“It all contributes to the cycle we’re seeing in the dissolution of health care in rural communities,” Slabach said.

Gabriella Dunn: 316-268-6400, @gabriella_dunn

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