Southeastern Rural Hospitals ‘Struggle’ With Staff Shortages, Low Reimbursements
About 35 hospitals -- mainly in rural areas -- have closed in Alabama, Georgia and Tennessee over the last 13 years because of insufficient funding and staffing shortages, the Chattanooga Times & Free Press reports. Hospital officials in the tri-state area said that "if something is not done soon," more facilities will close. In Alabama, for example, 17 rural hospitals have closed since 1987, and 74% of remaining hospitals statewide are losing money. The Times & Free Press reports that rural hospitals nationwide are expected to lose $15 billion between 1998 and 2004 because of reimbursement reductions resulting from the 1997 Balanced Budget Act, even accounting for funding restorations made by the Balanced Budget Refinement Act of 1999. In Tennessee, the Times & Free Press reports that reimbursements for TennCare, the state's Medicaid managed care program, are also a problem, with facilities generally reimbursed an average of 40% to 45% below actual costs. According to a report by the Tennessee Hospital Association, $84.8 million in TennCare costs for rural acute care hospitals went "unreimbursed" between 1995 and 1998. In addition, Bill Jolley, the hospital association's assistant vice president of rural issues, said that rural facilities "face a number of other challenges," including the difficulty of attracting staff to rural locations and a patient base that is "generally older, sicker and poorer" than that in urban areas. Together, such challenges force rural facilities to offer "limited services," he said. "They're about as bare-bones as they can get" because of their "tight budgets," he added.
Small Town Advantages
While rural hospitals face many "serious threat[s]," Fran Killian, chief nursing officer at the Pikeville, Tenn.-based Bledsoe Community Medical Center, said that such facilities do have some "advantages." She said, "The staff here are taking care of people they've known for a long time. That makes a big difference in care. They have a lot more invested in the hospital." In Jasper, Tenn., GrandView Medical Center has grown about 20% since opening in 1998 by "adapting to the specific needs of" the community. The Times & Free Press also reports that some relief may come from the federal level, as Congress is considering legislation (S 885) that would create a standard national Medicare reimbursement rate for rural and urban hospitals; under current reimbursement formulas that account for wages and other cost-of-living factors, the latter are often paid more than the former. Robert Bolden, director of fiscal services for the Georgia Hospital Association, said the bill would "help improve payments to rural hospitals across the country" (Park, Chattanooga Times & Free Press, 7/16).
