A nonprofit publication of the Kentucky Center for Public Service Journalism

As cash-strapped rural hospitals are forced to make dramatic choices, will federal help arrive in time?


By Liz Carey
Special to KyForward

Two weeks after St. Claire Regional Medical Center in Morehead furloughed a quarter of its staff, the hospital was caring for its first COVID-19 patient.

Cutbacks during a national health care crisis are counter-intuitive, but administrators say the cuts are necessary. In rural areas across the country, as well as in some urban areas, hospitals are laying off or furloughing staff due to financial concerns. They are facing crippling revenue losses due to restrictions placed on them in order to combat the spread of the coronavirus.

St. Claire Regional is the only hospital in Rowan County, population 23,333. In mid-March, Kentucky Governor Andy Beshear asked hospitals across the state to stop performing elective surgeries. By the end of March, St. Claire spokesperson Amy Riddle said, it was clear that changes needed to be made.

Closed signs hang on a recently closed Pickens County Medical Center in Carrollton, Ala. The hospital is one of the latest health care facilities to fall victim to a wave of rural hospital shutdowns across the United States in recent years. With hundreds of other hospitals endangered, residents are worried about getting health care amid the coronavirus outbreak, and administrators are trying to keep other facilities afloat. (AP Photo by Jay Reeves, via The Daily Yonder)

An estimated 90 percent of the surgeries at the hospital are elective, Riddle said.

“With all the restrictions placed on us, these were necessary measures,” she said. “All of the staff that have been furloughed are not on the frontlines of COVID-19. If we do get a surge, some of those employees may come back, if their skills can transfer to the clinical settings, and they understand that.”

Mostly, the employees were split between two parts of the hospital – its foundation, or non-profit arm, and its education department. Most of the employees were administrative and not clinical, she said.

The story is the same across the state. On March 27, Appalachian Regional Hospital laid off 500 people. On April 8, the UK Medical Center and Baptist Health both announced furloughs for employees.

While furloughing employees is important to a rural hospital’s fiscal health, it may harm the health of its staff, said Leslie Marsh, CEO for Lexington Regional Health Center in Lexington, Nebraska.

“The dichotomy of the rural health care workforce challenges in the face of COVID-19, is an unanticipated element of the pandemic,” Marsh said. “Most of the rural providers I have talked to across the state and the nation are financially strapped and hoping to avoid furloughing health care professionals, who will then be difficult to re-recruit if the organization makes it through the pandemic without closing its doors.”

Marsh said the only consistent demand for services in rural hospitals now is maternity care for those ready to deliver.

At the same time, her hospital, and other rural hospitals, need to prepare for the possibility that COVID-19 will arrive in their communities.

Lexington is a city of just over 10,000 in Dawson County. Located in southern Nebraska on the Platte River, Dawson County, population 23,709, has three positive cases of COVID-19, none of which have required hospitalization. According to Nebraska Health and Human Services, there have been 87 people in Dawson County tested. Eighty-three of them have come back negative.

“I’m certain that we will eventually see activity in rural communities – hopefully, these patients, who are poorer, sicker and more vulnerable to COVID-19 complications and mortality- have access to a hospital when the surge finally hits,” Marsh said.

The Coronavirus Aid, Relief and Economic Stability (CARES) Act, the $2.2 trillion stimulus package passed by Congress late last month, includes help for rural hospitals, it’s unclear how long that help will last.

“We are all watching our cash position rapidly decline; thin, if any, margins, move to negative while low volumes require thoughtful repurposing of staff,” she said. “We have all tried to avail ourselves of the programs introduced through the CARES Act, but we are also worrying about how long the lifeline will keep doors open…”

Brock Slabach, senior VP of member services with the National Rural Health Association, said some of that money may never even get to more than 30 percent of all rural hospitals.

Slabach said that private and non-profit hospitals are eligible for the Small Business Administration Paycheck Protection Program, but county hospitals, which make up a third of all rural hospitals, are not.

Hospitals are waiting for the money in the bill provided to the Centers for Medicare and Medicaid Services (CMS) to begin to trickle down to them, Slabach said. More than $100 billion in funding was provided to CMS, and $30 billion of that is being sent directly to hospitals, based on the amount of revenue the hospital gets for Medicare and Medicaid billing.

“That’s good news for rural facilities,” Slabach said. “It should help them. If you don’t qualify for the SBA loan program, you’re waiting for that $30 billion to start being sent out. Everyone is pretty tense right now.”

Tensions are high now, but what comes next is also a concern. How program funds are to be repaid is already a question for Marsh.

“We are happy to see Congress’ attention to this devastating national crisis and are hopeful we will weather the storm,” she said. “We need more assistance from all payers and we need these programs to understand that forgiveness of financial support is the best option for access to health care, in rural areas particularly. Rural providers have been living on the edge so long that this will not be easy to recover from – one would hope that this crisis and need for hospital beds, ICUs and care would illustrate the importance of the safety net.”

In the background there are those seeking to take advantage of the situation as well, she said.

“Meanwhile, the same and even additional predatory practices by commercial payers continue, even during this national crisis…Without sufficient help provided soon, rural will suffer many more hospital closures with subsequent limited-to-noo access to care, leading to the crumbling of rural infrastructure in general.”

This story originally appeared in the The Daily Yonder. It is reprinted with permission.


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