Monday, March 24, 2014

Even with special help, lack of Medicaid expansion leaves South Carolina's rural hospitals struggling

States' decisions not to expand Medicaid under federal health reform is putting pressure on rural hospitals, many of which are losing money and struggling to remain open, especially in the South. The solution for South Carolina's rural and critical-access hospitals is to look "for help from urban hospitals or large hospital chains in terms of merger, consolidation, affiliation or formal clinical cooperation agreements," Joey Holleman reports for The State newspaper in Columbia. "The national trend began years ago and has picked up steam in the Upstate in the past year."

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"About one-third of South Carolina’s total hospitals are in rural counties, but they account for only 10 percent of the state’s hospital beds and about 5 percent of in-patient days," Holleman writes. One of those rural hospitals, Fairfield Memorial Hospital, a 25-bed hospital in Winnsboro, "managed a net profit of $517,116 over the past five years" but lost more than $11 million in expenses vs. income for patient services during that span. CEO Michael Williams told Holleman, “If a small hospital is not looking at all its options, it’s not going to survive." (Rural Assistance Center graphic)

Charles Beaman, CEO of Palmetto Health, which owns six South Carolina hospitals, "said the dynamics of health care have been altered by the shift by insurance companies to more out-of-pocket expenses, putting more financial burden on the patients. Medicaid’s move to link reimbursements to quality of care, which in the short term often means more expense for hospital improvements" and the decision to not expand Medicaid, Holleman writes.

"Gov. Nikki Haley’s administration increased reimbursement to 19 rural hospitals for uninsured care to lessen the blow of turning down Medicaid expansion," but officials say rural hospitals need more help, Holleman writes. "They don’t necessarily want a full-scare purchase or merger. Instead, they want to band together to get quantity discounts on equipment or to negotiate higher reimbursements from major insurers such as BlueCross BlueShield of South Carolina. They might combine labs or work out an affiliation with a larger hospital that has specialized, expensive heart care that the smaller hospitals can’t afford to provide." (Read more)

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