Last week, State Auditor Stacey Pickering released a report that raised doubts about the survivability of at least a third of Mississippi’s 19 publicly owned rural hospitals.
Tucked away in the next-to-last page of that 54-page report was a major reason these hospitals are in a financial bind.
The state’s refusal to expand Medicaid to the working poor has reduced the profitability of these hospitals and compounded an already difficult set of circumstances.
Being a good Republican, Pickering doesn’t come out and say this was a stupid move by Gov. Phil Bryant and the Republican leadership in the Legislature.
But the facts are, hospitals such as Greenwood Leflore Hospital — one of six the state auditor says are in “poor” financial condition — would be in better shape if Mississippi had accepted a few years ago the federal government’s offer to pay for adding a couple of hundred thousand people to the Medicaid rolls.
Before the Affordable Care Act, more commonly known as Obamacare, was enacted in 2010, hospitals that cared for a high number of uninsured patients would receive subsidies from the federal government to help offset some of the cost. Those payments, though, have been steadily reduced to help pay for Obamacare’s Medicaid expansion.
The Democrats who pushed Obamacare into law figured no state, no matter its political leanings, would pass up such a generous offer — 100 percent of the cost of benefits being covered by the federal government in the first three years, then gradually dropping to 90 percent. They were wrong. A majority of states led by GOP governors turned the deal down.
So now you have a situation in which Greenwood Leflore Hospital wrote off last year $35 million in uncompensated care at the same time that subsidies for this care were being sliced.
It’s not the only reason the Greenwood hospital has been operating several million dollars in the red for the past two years, but it has been a major contributing factor.
It has to have been a factor as well for the other two nearby Delta hospitals — Tallahatchie General in Charleston and North Sunflower Medical Center in Ruleville — that also scored poorly on the state auditor’s assessment of financial condition.
The three institutions have much in common. They serve areas where about four in 10 people live in poverty — double the state average and three times the national one — and where one out of six residents who are too young to qualify for Medicare have no insurance at all.
They also are located in a region that is bleeding people. Leflore County’s population loss of an estimated 8 percent since the last census is one reason the hospital has too many empty beds.
Certainly, as Pickering’s report points out, rural hospitals generally have a hard time attracting and keeping physicians, particularly specialists. They struggle against the perception — especially common with those who have private insurance — that medical care in big cities has to be better. The patients they serve tend to be older, poorer, sicker and more dependent on government insurance programs than their urban counterparts.
Thus, these hospitals are more financially susceptible when Medicare and Medicaid continually shrink reimbursements.
It also may be that areas where population is declining simply can’t support as many medical providers. Greenwood’s hospital certainly would benefit if there weren’t so many alternatives nearby — six other smaller hospitals within 45 miles.
The auditor’s report is likely to revive the discussion of a few years ago about whether Greenwood Leflore Hospital should be seeking a buyer. When a hospital starts losing money year after year, it generally either sells or it closes.
Greenwood’s hospital is fortunate in that, because of its low debt load and nearly $40 million in reserves, it’s not in a panic situation. It can try to ride out the current storm by cutting expenses further while it tries to raise its patient volume.
The turnaround would be easier, though, if Mississippi didn’t have a governor who seems more concerned about following the anti-Obama party line than he is about whether rural hospitals survive.
