Politics & Government

Another rural Kansas hospital is closing. A new fight over Medicaid expansion has begun

Another Kansas hospital is closing. This time it’s in Fort Scott, a town of nearly 8,000 only a couple miles away from the state’s eastern border.

But the decision by Mercy to shutter its 46-bed hospital there is echoing across the state, with the medical community and politicians once again sounding the alarm that the lack of Medicaid expansion in Kansas is harming rural hospitals trying to stay afloat financially.

The Fort Scott decision follows the closure of Mercy’s hospital in Independence in 2015, which also drove the push for expansion. And it comes as rural hospitals are struggling nationally.

A report released last week by the Government Accountability Office found that the pace of rural hospital closures doubled in 2013-2017 compared to the previous five years, with 64 shutting their doors.

In about a month, Kansas voters will head to the polls in an election for governor that could easily determine whether the state expands Medicaid or not.

The issue has been a political lightning rod because of expansion’s origins as part of the Affordable Care Act, commonly called Obamacare.

Among the major candidates for governor, Democratic Sen. Laura Kelly and independent Greg Orman support expansion. Republican Secretary of State Kris Kobach opposes it.

“This should not have happened. Simply put: if Kansas had expanded Medicaid, Fort Scott would still have a hospital,” Kelly said.

Kobach in the past has responded to Kelly’s Medicaid expansion support by saying: “And money grows on trees.”

Rural hospitals struggling

The Legislature passed expansion once before, in 2017, but then-Gov. Sam Brownback vetoed it. Supporters didn’t have enough votes to override the veto.

Lawmakers may take up expansion again if they know the governor will sign the bill.

Some key Republican lawmakers continue to oppose expansion. Rep. Dan Hawkins, a Wichita Republican who chairs the House health committee, said expansion may help hospitals financially, but that expansion alone wouldn’t save them.

“Politically … somebody’s going to make that comment that that absolutely would have saved this hospital and almost invariably we find out that’s not the case. It’s not the panacea that people think it is,” Hawkins said.

The Fort Scott hospital’s closure could also affect the only state Senate race this year. The hospital sits in the district of Republican Sen. Richard Hilderbrand, who is running for election this year because he was previously appointed.

Hilderbrand opposes expansion, while his opponent, Democrat Bryan Hoffman, supports it.

Under federal law, states that expand Medicaid eligibility up to 138 percent of the federal poverty limit ($34,638 for a family of four) receive additional federal funds to pay for much of the cost of expansion. More than 30 states have expanded.

The Government Accountability Office report was requested by U.S. Sen. Claire McCaskill, a Democrat from Missouri. Her state also has not expanded Medicaid and four rural hospitals have closed there since 2010.

The report found that although only about half of all rural hospitals are in states that didn’t expand Medicaid, 83 percent of the ones that closed from 2013 to 2017 were in those states.

While expansion would provide health coverage to an estimated 150,000 Kansas residents, proponents also say it would help rural hospitals financially by allowing them to provide less uncompensated care.

Federal law requires hospitals to treat people who come to their emergency rooms, whether they have insurance coverage or not. Mercy Hospital says it spent $2.56 million in fiscal year 2017 on uncompensated care, as well as the traditional charity care write-offs it’s obligated to make to maintain nonprofit status.

Mercy Kansas Communities Inc. took a $13.4 million annual loss, according to its most recent financial disclosure form filed in 2017. But the report said the Fort Scott hospital itself had annual revenue of $32.5 million and expenses of $21.8 million.

Under expansion, Mercy Fort Scott would have received an additional $2.7 million in revenue each year on average, according to the Kansas Hospital Association, which has lobbied for Medicaid expansion.

“Unfortunately these closures of community hospitals have become more common than we’d like in our state,” said Cindy Samuelson, a spokeswoman for the hospital association, “and I think we need to keep asking ourselves, ‘Are we doing all we can to support health care in Kansas?’”

Hawkins said the future of rural healthcare will likely involve fewer hospitals, but more “super clinics” that provide emergency room services and give access to primary care physicians with maybe a couple beds for overnight care.

“I think that model is really starting be talked about and I think we will probably see that move ahead to some degree,” Hawkins said.

Expansion may hinge on election

While Kelly has been clear in her support for Medicaid expansion, Kobach has criticized expansion as too costly.

Kelly said it’s much more difficult to protect the health of rural communities when people have to drive long distances for care. She said Kansas didn’t heed the lesson of the closure of the Independence hospital and expand Medicaid.

“Now it’s happened again, this time in Fort Scott. If we don’t take action, it will continue to happen and devastate our communities. We must make a change this year and support leaders who put the best interests of Kansas families first,” Kelly said.

At a state fair debate in September, Kobach said that “in every state that has expanded Medicaid, they have found that the actual cost is far greater” than estimates (a study published in 2017 in Health Affairs found no significant increases in spending from state funds in states that had expanded).

“So if you talk to people like this who thinks money grows on trees and don’t realize that it is the taxpayers money then of course you will always spend more but you won’t actually look at the numbers,” Kobach said at the debate, referring to Kelly. “The better approach is to do something smart and look at how we can expand that money effectively.”

Kobach has proposed launching a direct primary care system in Kansas where individuals would pay $50 a month for unlimited visits with their primary care physician.

Orman also supports using a direct primary care system. He has said direct primary care could be coupled with catastrophic insurance coverage to drive down health costs and improve access to care.

“The closing of mercy hospital in Fort Scott is a big loss for everyone in Bourbon County. Unfortunately, it will be the first of many if we don’t elect a governor who rejects partisan politics and puts Kansans first,” Orman said. “My plan to grow the Kansas economy will allow us to invest in our priorities, like healthcare, without raising taxes.”

Hospital dates back to 1886

The Fort Scott hospital traces its roots back to 1886, when two Sisters opened a hospital at the request of a local priest.

The current facility opened in 2002. It has 230 employees who in 2017 admitted about 1,000 patients, performed about 1,500 surgeries and saw another 70,000 people on an outpatient basis.

Hospital officials were making investments as recently as 2016, opening a pool for the rehab unit and upgrading to 3D mammography.

But they’ve been concerned about the financial sustainability of the hospital since at least 2014, as potential patients sought medical care in larger cities and insurance reimbursements, especially from Medicare and Medicaid, stagnated.

Reta Baker, the hospital president, said in a statement that Mercy considered “every possibility for keeping our doors open, and ultimately we had to acknowledge that it’s a different era for hospital care in Fort Scott,” she said.

Mercy officials said they’re working out a plan to keep primary care services in Fort Scott. But the hospital will close Dec. 31, including all inpatient services, the emergency department and ambulatory surgery.

April Holman, a spokeswoman for a group called the Alliance for a Healthy Kansas that lobbies for Medicaid expansion, said the state needs to embrace it for rural hospitals to have “a fighting chance.”

“While we hope it will be the last hospital closure in Kansas,” Holman said, “we are not convinced this will be the end.”