Rural hospitals will be hurt the most from Minnesota Medicaid cuts

Government action, such as cuts to Medicaid in Minnesota, has an “outsized impact” on rural residents, Sarah Melotte reports for the Daily Yonder.

The Trump administration recently announced its intent to withhold $259 million from Minnesota’s Medicaid reimbursements due to fraud concerns. CMS Administrator Mehmet Oz said Medicaid funds in Minnesota were going to "bogus" centers for autistic children and a behavioral health organization that had bills showing doctors working 24 hours a day for more than 450 days.

Percentage of hospital revenue coming from low-income health insurance programs. (Map by Sarah Melotte, Daily Yonder, data from the Center for Healthcare Quality and Payment Reform, Click to enlarge)

Rural hospitals are disproportionately affected by these cuts. Melotte explains that rural hospitals are more likely to operate with negative profit margins than urban hospitals, and 39 of Minnesota’s 98 rural hospitals have negative operating margins. This means the rate of uncompensated care will increase even more in these rural hospitals.

Some of these hospitals are able to stay open using non-operating revenue, such as taxes or philanthropy, but this isn’t the case for all of them, reports Melotte. More than 100 rural hospitals throughout the U.S. have had to close in the last decade, causing rural residents to have to travel farther to access the care that they need.

One nonprofit in Minnesota that houses people with disabilities reported to Minnesota Public Radio that “any cuts to Medicaid funding will directly result in reduced services.”

Medicaid now accounts for around 19% of discharges in rural hospitals nationwide, Melotte writes. “In communities where hospitals operate on thin margins, even small cuts in federal spending can destabilize entire systems of care.”

GOP considers cutting millions in Medicaid funding; rural health may pay the price

 Georgetown University graph, from 2022-2023 American Community Survey data

President Donald Trump has a big agenda that needs big funding. To pay for Trump's plan, GOP members are considering axing chunks of federal Medicaid spending, which could "put the residents of small towns and rural communities and their health care systems at serious risk," report Georgetown University researchers.

Rural Americans who are non-elderly adults and children "are more likely to rely on Medicaid/CHIP (Children's Health Insurance Program) for their health insurance," researchers explain. Medicaid reductions could be especially harmful for:

• Children in Arizona, Florida, North Carolina, Virginia, South Carolina, California, Minnesota, Georgia, South Dakota and Alaska.
• Adults in Arizona, New York, Washington, Texas, Kentucky, Virginia, Louisiana, Oregon, South Carolina and Montana.

Medicaid reductions would be particularly harmful for rural children in 10 states.
 (Georgetown University graph, from 2022-2023 American Community Survey data)

Part of the reason many rural residents rely on Medicaid is because their incomes tend to be lower and they lack "access to employer-sponsored health insurance, meaning that public coverage such as Medicaid and the Children’s Health Insurance Program fill an even more critical role in these areas than in other areas of the country," according to the Georgetown University report. "While uninsured rates have come down significantly since passage of the Affordable Care Act, they remain higher in small towns and rural areas."

Siphoning millions in Medicaid funding to pay for other priorities "poses a very severe threat to rural communities," researchers add. "Hospitals and other providers in rural communities are already operating on tighter margins and disproportionately rely on Medicaid for their patient revenues. . . . Large cuts will have dire consequences for communities that are already struggling."

Report: Chain drugstores get $23.55 to fill a blood pressure prescription, but a small drugstore gets only $1.51

Adams Family Pharmacy often loses money filling
prescriptions. (Photo by A. Miller, KFF Health News)

Even as independent pharmacists face low or no profits from medication sales, pharmacy middlemen reimbursements favor large drugstore chains. The Federal Trade Commission and several lawmakers are starting to take aim at prescription benefit managers' power and repayment practices.

"On Sept. 20, the FTC sued three of the largest PBMs. . .The lawsuit followed a scathing FTC report that said the 'dominant PBMs can often exercise significant control over which drugs are available, at what price, and which pharmacies patients can use to access their prescribed medications,'" reports Andy Miller of KFF Health News.

How PBMs dominate reimbursement in Georgia is a drastic example of smaller pharmacies being shorted. The American Pharmacy Cooperative, which represents independent pharmacies, "reviewed the price differential paid to a north Georgia pharmacy and nearby chain stores," Miller explains. "The analysis showed chains were paid well beyond the family business. For example, the chains received an average of nearly $54 for the antidepressant bupropion, while Bell’s Family Pharmacy in Tate, Georgia, got $5.54. . . . For a drug used to treat blood pressure, amlodipine, chain pharmacies received an average of $23.55, while Bell’s got $1.51. . . Bell’s Family Pharmacy closed earlier this year."

Nikki Bryant is a pharmacist and co-owner of Adams Family Pharmacy in rural Cuthbert, Georgia, who has worked to find creative ways to bolster the business' income because the pharmacy loses money. "Bryant and other independent pharmacists say they lose money filling certain prescriptions while reimbursements favor chain pharmacies like CVS that have corporate ties to pharmacy benefit managers," Miller adds. "Bryant said she can make more profit on cake and coffee than with many medications."

Some lawmakers are scrutinizing PBMs. "Members of both parties in Congress have tackled PBM reform," Miller reports. "House members recently introduced another proposal, known as the Pharmacists Fight Back Act, which supporters say would add transparency, limit costs for patients, ensure they get the benefit of drugmaker discounts, and protect their pharmacy choices."

Years of underpayments by PBMs to smaller pharmacies have disproportionately harmed rural communities by "accelerating closures of mom-and-pop pharmacies across the country, said the National Community Pharmacists Association," Miller reports. "The U.S. loses almost one such pharmacy a day, said Anne Cassity, a senior vice president of the association."

American suicide rates continue to climb, with some rural states seeing double the number of deaths. Why?

When it comes to suicide prevention, what works where
hasn't been found. (Photo by A. Nath, Unsplash)

After decades of suicide prevention funding and plan roll-outs, the number of self-inflicted deaths in the United States has only increased, with some rural states shouldering double the number of deaths compared to their urban counterparts, reports Cheryl Platzman Weinstock of KFF Health News.

"From 2001 through 2021 suicide rates increased most years, according to the Centers for Disease Control and Prevention. Provisional data for 2022, the most recent numbers available, shows deaths by suicide grew an additional 3% over the previous year. CDC officials project the final number of suicides in 2022 will be higher," Weinstock adds. "Suicide rates in rural states such as Alaska, Montana, North Dakota, and Wyoming have been about double those in urban areas."

Meanwhile, mental health experts maintain that the ideas and educational programs aren't to blame for the results. Instead, they say, "the policies simply aren’t being funded, adopted, and used," Weinstock reports. "That slow uptake was compounded by the Covid-19 pandemic, which had a broad, negative impact on mental health. National experts and government officials agree the strategies simply haven’t been embraced widely."

How suicide data is determined and reported isn't uniform yet either. "Without accurate statistics, researchers can’t figure out who dies most often by suicide, what prevention strategies are working, and where prevention money is needed most," Weinstock writes. Without more clarity, deciding on the best preventative practices can become impossible. Interventions that work in sparsely populated Wyoming, may not work in the more populated farming towns of southern Indiana.

Other means to prevent or address suicide attempts also have gaps. "The fledgling 988 Suicide & Crisis Lifeline [also] faces serious problems," Weinstock reports. "Only 23% of Americans are familiar with 988 and there’s a significant knowledge gap about the situations people should call 988 for, according to a recent poll. . . . Most states, territories, and tribes have also not yet permanently funded 988, which was launched nationwide in July 2022."

While some regions are introducing 988 awareness campaigns, several states, including Colorado, are trying something new. Weinstock explains, "State officials installed financial incentives for implementing suicide prevention efforts, among other patient safety measures, through the state’s Hospital Quality Incentive Payment Program. . . .The program hands out about $150 million a year to hospitals for good performance. . . . Experts hope other states will follow Colorado’s lead."

Rural Mainstreet economy reports negative growth for the sixth month in a row

Economic challenges have led to below growth neutral
survey results. (Photo by L. Pound, The Packer)

Last summer, the Rural Mainstreet Index showed good economic growth. But after June 2023's high point of 56.9 on the 100-point scale, the survey's 10-state region reported continued decreases, with September marking the first month below growth neutral at 49.5 -- the term used for a "neutral" growth score of 50. The downward trend has continued over the past six months," reports The Packer, which covers the fresh produce industry. 

Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University issued a press release explaining the challenges facing farming and energy-dependent regions, saying: "Higher interest rates, weaker agriculture commodity prices and a credit squeeze are having a significant and negative impact on Rural Mainstreet businesses and Rural Mainstreet farmers."

"Almost three-fourths of bank CEOs named low farm-commodity prices as the biggest risk for farms in 2024," the release said, "And approximately 44% of bankers indicated that the financial positions of farmers in their area had weakened over the past six months."

Gross told The Packer: "This is the eighth time in the past nine months that the index has fallen below growth neutral. Higher borrowing costs, tighter credit conditions and weaker grain prices are having a negative impact on the purchases of farm equipment."

About RHI methodology: Each month, community bank presidents and CEOs in non-metro regions of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed on their unique economic conditions and projected outlook. The survey offers the most current real-time analysis of the U.S. rural economy, which gleans its data from about 200 rural communities with an average population of 1,300.

Rural America shows population growth and a decline in poverty, according to a new report

Rural America added population for the first time
in decades. (USDA photo)

After multiple decades of decline, rural America is growing in population and has fewer counties where residents live in "persistent poverty," reports Jamie Henneman of The Prairie Star, which serves central Montana. The Department of Agriculture's Economic Research Service recently released its "Rural America at a Glance" report, which analyzes population, employment, housing and poverty in America's non-urban areas. "Much of the data suggested a positive trend for Americans living outside of cities, according to USDA ERS economist James Davis."

"We saw rural populations grow a quarter of a percent from 2020 to 2022 after a decline or near-zero growth between 2010 and 2020," Davis noted in the report. "That's an eighth of a percent growth per year, or 50,000 people more in rural areas each year. . . . Domestic migration favored rural areas for their recreation and as retirement destinations. Rural areas near metro areas were also popular."

The Census Bureau determines national "poverty" income thresholds. "In 2023, a family of four making under $29,960 was considered to be in poverty," Henneman writes. "And an individual household making under $14,891 was considered to be in poverty."

"We had 244 rural counties considered persistently poor from 2011 to 2021," Davis said in the report. "Since then, 26 more counties entered persistent poverty, but 55 counties left the designation. Overall, we had 9.7 percent fewer counties experiencing persistent poverty compared with a decade earlier."

"Housing was another topic considered in the USDA ERS report," Henneman adds, as well as how rural employment is fairing post-pandemic.