Hospital on Ky.-Tenn. border illustrates the value of Medicaid expansion to rural health-care facilities

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Jellico Community Hospital, on the Kentucky border in the Cumberland Mountains of Tennessee, was taken over by Texas-based Community Hospital Corp. last May after the previous owners wanted out because they were losing "millions a year," Harris Meyer reports for Modern Healthcare. Now, jobs are safe and the economically depressed community can hold onto the hope that its hospital will survive.

Losing money is all too common in rural hospitals, especially in states like Tennessee that haven't expanded Medicaid, but about half of the hospital's patients are from Kentucky, which did expand Medicaid, and it operates a clinic in the seat of the Kentucky county Jellico borders. "The hospital's administrators, doctors and nurses all say it's easier to get testing and specialty care for Kentucky Medicaid patients," Meyer writes.

The 31 states that have expanded Medicaid have been able to "shore up finances" in many of their rural hospitals, Meyer writes, but others have not fared so well. Nationwide, more than 50 rural hospitals have closed in the past six years, and nearly 300 more are in deep financial trouble, according to the National Rural Health Association. In Tennessee, Meyer notes that three hospitals have closed since 2013 and a fourth will close in May.

Meyer notes that the Jellico hospital still has big problems. It serves an area where good-paying jobs with health benefits have dwindled, only 10 percent of the population has private health insurance, residents have higher-than-average rates of disease, and there is rampant obesity and drug abuse.

The 54-bed hospital with its staff of 232 is the community's largest employer, as many rural hospitals are. The mayor emphasized how important it is for the hospital to survive, telling Meyer that new businesses will often not consider moving to an area that doesn't have one. (Read more)