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Monday, May 12, 2014

10 Alabama hospitals shuttered in past three years

In the past three years, 10 Alabama hospitals have closed, including Chilton Medical Center, Infirmary West and Southwest Alabama Medical Center. Seventeen have shuttered since 2000. Although these closings can be partially attributed to outpatient treatments, improved technology and other things that reduce pricey inpatient stays, "Recently there are extreme pressures on hospital budgets related to the health care reforms, Medicare cuts, the lack of Medicaid expansion and Alabama's peculiar health-care landscape that are pushing hospitals, especially those in rural areas, to the brink," Mike Oliver writes for Alabama Media Group.

Glenn Sisks, CEO of Coosa Valley Medical Center, agreed that the lack of Medicaid expansion are putting pressure on hospital budgets. "The problem associated with [the lack of Medicaid expansion] goes back to the passage of the Affordable Care Act bill several years ago," Sisks said. This creates not only a financial problem but also a public health issue. "We are generally treating ER's as primary care office settings. It's very expensive, and it also causes people to delay care," Sisks said.

In 2012, 22 rural hospitals were operating with a negative margin, and the average operating margin was 1.1 percent. According to the Alabama Hospital Association, hospitals gain 38 percent of their money from Medicare, 20 percent from Medicaid, 31 percent from commercial and 12 percent from other. Sisks said another concern is Alabama's low wage index, which assists in regulating Medicare reimbursement rates. Now Medicare dollars have been cut.

According to Dr. Will Ferniany, CEO of UAB Health System, UAB "gets about 67 cents on every patient dollar spent on Medicaid," Oliver writes. "To make ends meets, hospitals have to squeeze what they can out of the commercial insurance side, which in Alabama is primarily the formidable Blue Cross and Blue Shield of Alabama, which has major market share and is quick to point out it has had some of the lowest premium rates in the country."

Dr. Allen Perkins, chairman of Department of Family Medicine at the University of South Alabama and president of the Alabama Rural Health Association, said the state needs a health care infrastructure. "We need care delivery, but we don't need all care to be provided by hospitals, and we don't need hospitals to provide every service. . . . Optimistically, what I see happening is the leadership in the state comes to understand that without health-care infrastructure, we cannot recruit industry," Perkins said. "Pessimistically, I see a lot of hospitals closing." (Read more)

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