Kansas has more rural hospitals at immediate risk of closure than any other state in the nation, with 31 of Kansas’s 98 rural inpatient hospitals at risk.
Since 2010, eight Kansas hospitals have closed, leaving patients with less access to health care in their communities. The added barriers can add more difficulty on a population that already experiences health disparities compared to urban and suburban populations.
“There’s longstanding disparities that are prevalent in rural communities as well as communities of color,” said David Jordan, president of the United Methodist Health Ministry Fund, “and I think that’s attributable to multiple factors: access to health care, access to educational and economic opportunity, access to early childhood services, and then physical activity and lifestyle behaviors.”
The University of Kansas’s Center for Rural Health reports that rural death rates are higher, that accidents are more likely to result in death and that suicide is significantly higher. The health care system responding to these trends has significantly fewer physicians, specialists and mental health services than non-rural areas, and is more likely to use volunteers for emergency services.
What happens when you lose a hospital?
Mercy Hospital in Fort Scott, Kansas, closed its doors in early 2019, leaving the town of about 7,500 people having to cross state lines into Missouri to reach the nearest hospital. Ascension Via Christi, a Pittsburg, Kansas, based health care provider moved into what was Mercy to provide emergency services, but it announced in December that it would also exit the market.
In an emergency, locals would have to drive about 25 minutes to Nevada, Missouri, or 40 minutes to Pittsburg.
The result of the loss of health care access is fear in the community, Jody Love said. Love worked with Mercy before it closed its doors in community health, clinic quality and as a social worker. While working for the hospital, she formed the Healthy Bourbon County Action Team, which promotes access to healthy food, physical activity and tobacco cessation.
There are a lot of fear and people who have elderly parents or are caring for those with disabilities or chronic disease and how they’re going to get the care, or how are they going to get to a hospital on time,” Love said. “Individuals who are women, who are pregnant are having to travel long distances to give birth, and that’s kind of scary.”
The downstream economic impact is still too early to tell, but studies tend to show the closure of a community’s sole hospital leads to lower overall employment and lower per capita income at the county level. A 2022 University of Pennsylvania study posits that hospital closures reflect existing downward economic trends rather than drive them.
Bourbon County’s population has steadily declined in the past century, losing population in nine of 10 census counts. In 2020, about 14,000 people called the county home, about half of its population peak over a century earlier.
“The population decline starts to snowball with the burden that puts on government, with per capita evaluations; it’s like a snowball effect when you reach a certain point where you’re not able to meet critical services for your community,” Love said. “From a tax burden standpoint, a lot of the emergency management and ambulance, all of that burden ended up on the county because by law they’re required to provide those services.”
Why are Kansas hospitals in such rough financial shape?
The Kansas Hospital Association says hospitals are struggling with the cost of maintaining a workforce, inflation and hospital reimbursement rates from private and public insurers. All three are related: Inflation increases desired salaries, which in turn increases workforce competition and turnover, which increases the reimbursement costs of insurers.
But much of the care doled out in Kansas doesn’t even cover the costs hospitals incur to provide it. Medicare, the government-funded insurance program for seniors, historically has underpaid for services. In 2022, it hit an all-time low, providing just 82 cents for every dollar hospitals spend caring for Medicare patients, according to The American Hospital Association.
“In the position we are in, as 122 community hospitals in our state, we’re not going to turn anyone away. So we’re open 24/7/365 for everybody. And if you come in and you have Medicare and Medicaid and they do not pay the cost of care, there’s really nothing we can do about it,” said Cindy Samuelson, senior vice president member and public relations specialist for the Kansas Hospital Association.
In Kansas, 91% of hospitals reported that more than half of their inpatient days billed are to Medicare or Medicaid, and 43% of hospitals said Medicare and Medicaid patients account for more than 75% of their billable inpatient days.
The state has also not opted into the expansion of Medicaid, which several hospital providers cited as another drain on expenses. Just 3.8% of hospital care in Kansas is uncompensated, but it could be nearly halved for certain types of hospitals if expanded to people who make up to 138% of the federal poverty level — in 2024 that’s $20,783 for an individual.
“Expanding Medicaid would have a huge impact on some of these rural hospitals. Bottom line, if we expanded Medicaid, critical access hospitals, 44% of their uncompensated care would be wiped off the book,” Jordan said.
Private insurance is trickier to determine the amount reimbursed for services delivered. Hospitals and insurance companies negotiate their rates and can get extremely granular on which services insurance covers and the rate it will pay. But a study from the Kaiser Family Foundation in April 2020, prior to the pandemic causing a slew of issues in the health care industry, estimates that private insurance pays out double for all hospital services on average.
But private insurance comes with its own headaches for hospitals, which have to deal with additional administrative costs when dealing with private insurers.
“Part of the reason health care is so expensive in the United States is because we have negotiators, we have individuals involved with handling transactions that are not either rendering the care or receiving the care. So the more pieces that you insert in between the person who’s rendering the care and the person who’s receiving the care, and everybody wants a piece of that pie, the more expensive that becomes,” said Aaron Herbel, CEO of Mercy Hospital in Moundridge, Kansas.
That can happen with Medicare as well. Medicare Advantage plans, which are offered by private insurance but funded through Medicare, comes with similar administrative burdens.
More than 40% of total costs in hospitals is administrative — the paperwork, dealing with insurers who must authorize tests or treatment and billing.
What is a Rural Emergency Hospital?
With difficulty to fit into traditional payment models for hospitals, Rural Emergency Hospitals were created to fill gaps in services while getting subsidized by the federal government. It acts like a middle ground between a health clinic and a hospital — offering 24-hour-a-day emergency services like hospitals, and with primary care services like clinics.
The U.S. Congress approved the new designation in the Consolidated Appropriations Act of 2021, and it took effect in January 2023.
But the designation also adds limits to what the hospital can offer, particularly that stays must remain under an average of 24 hours or less.
Mercy Hospital in Moundridge, one of three Kansas hospitals that have gained the status as a Rural Emergency Hospital, said the hospital faced tough decisions when deciding to opt into the Rural Emergency hospital designation. The other two are Rush County Memorial Hospital in La Crosse and SCK Health in Arkansas City.
“We really appreciate the ability to see that patient who gets admitted to a hospital for several days, three to five to seven days, however long they’re here, and we are able to watch them walk out of the hospital with a smile on their face because they’re well,” Herbel said. “But realistically, we had to look at what it was costing us to provide that service for a continually decreased volume, and at the end of the day, we had to say it’s not worth it.”
Mercy gave up acute inpatient care, which includes treatment for brief but severe health episodes, and swing beds, which includes long-term nursing care. With a reduction in services, Rural Emergency Hospitals may be more appropriate in rural areas that are relatively close to other health care providers.
“McPherson Hospital is about 20 minutes to the north, and Newton Medical Center is about 20 minutes to the south,” Herbel said. “Both of those hospitals have ICU services, both of those hospitals have OB services. And so that does give us a certain ability to know that we’re not just totally leaving our patients stranded if they should need higher level acute care service.”
Rural Emergency Hospitals are paid differently than other hospitals, with a monthly distribution by the Federal Government of $272,866 per month, and pays 5% above the reimbursement rate of the Hospital Outpatient Prospective Payment System. The model can be resilient for rural hospitals, where it may experience lulls in patients.
“There are times where you might have a lot of people, like in the winter when people are sick, and then there are times you wouldn’t have any but guess what, you still have to pay your electric bill, you still have to pay your staff, you still have to pay all those other standing costs,” said Samuelson, of the Kansas Hospital Association.
Other types of rural hospitals
Rural Emergency Hospitals are the latest addition to special hospital designations designed to reduce financial vulnerability and to improve access to vulnerable rural communities. The hospitals that have the easiest transitions are Critical Access Hospitals.
Critical Access Hospitals are limited to 25 or fewer acute care impatient beds, at least 35 miles from the nearest hospital, maintain a stay for 96 hours or less and provide emergency care around the clock.
In return, Medicare fully funds the cost of care plus 1%, rather than the reimbursement below cost typical of Medicare, flexibility in staffing, access to technical assistance and grants and factoring in capital improvements when determining Medicare reimbursement.
Counties have also taken an increasingly large role in providing funding for hospitals. In Fort Scott, which lost its hospital, the county passed a quarter-cent tax to fund an emergency department, with the remaining funds going to EMS and property tax reductions.
The vote passed by a margin of 76-24. But it may also be opting into the Rural Emergency Hospital model — county officials said they are watching the Rural Emergency Hospital Adjustment Act and hope it will allow previously closed hospitals to re-apply for the designation.
As reported in the Topeka Capital Journal
