The financial strain of being prepared for COVID-19 and putting off other services has contributed to the closing of 12 rural hospitals — including Pinnacle Regional Hospital in Boonville — nationwide in 2020.
In other locations, rural providers have laid off employees and cut hours as revenues fell.
For several rural health providers around Missouri, the ballot measure that would expand Medicaid is important for stable revenue and more coverage for their communities.
“Those hospitals are operating at even lower operating margins. If they can get a few bucks, that would provide them a little financial stability in a time when there isn’t a lot of financial stability for rural hospitals,” said Todd Ahrens, CEO of Hannibal Regional Healthcare System.
The initiative petition to put Medicaid expansion on the ballot is being checked to see if it has enough signatures. Its backers argue it is the solution for rural health care.
“The single best thing we can do to keep rural hospitals open in Missouri is expanding Medicaid,” campaign spokesman Jack Cardetti said. “It just is the one policy decision we could make that’s going to instantly provide some relief and help to those.”
Under the Affordable Care Act, the federal government will cover 90 percent of the cost of extending Medicaid benefits to those making 138% of the federal poverty level — $12,760 or less for an individual. If passed, an estimated 230,000 Missourians could be covered.
The expansion of Medicaid was originally included in the Affordable Care Act. But in June 2012, the Supreme Court ruled the federal government could not compel states to expand their coverage. Since then, 36 states have expanded their Medicaid programs.
“Of course, if it passes there is still a lot of legislative and political work to go through,” Ahrens said.
Which is why even those practitioners that speak in favor of Medicaid expansion wouldn’t tout it as the singular solution to bridge rural health care disparities.
However, generally, the math is simple – more insured patients mean less uncompensated care.
NO SILVER BULLET
A report from the Missouri Hospital Association estimates that the state’s hospitals have lost 40% of inpatient revenues and 60% of outpatient since the beginning of the outbreak, largely due to a sudden end to elective procedures.
“It is noteworthy that the COVID-19 emergency has had a disproportionate effect on rural hospitals, as a greater share of their revenue comes from outpatient rather than inpatient services,” the report said. “On average, 70% of rural hospitals’ revenue is generated by outpatient services.”
Scotland County Memorial Hospital CEO Randy Tobler said he was considering closing his facility in April.
“We’re doing better today than we were a month or so ago, because at that time we were uncertain about any sort of relief funds,” Tobler said.
Medicare and Medicaid provide the bulk of Scotland County Memorial’s revenues.
Rural residents are also more likely to have chronic diseases that become increasingly worse without care, according to the Centers for Disease Control. Moreover, people who lack insurance are more likely to put off care until the situation is emergent, meaning they often access care in the most expensive place – the emergency room.
“We take care of uninsured people no matter what,” said Chris Stewart, CEO of Katy Trail Community Health. “When people are uninsured, they delay seeing their physician so what we see is late diagnoses.”
Katy Trail Community Health is a federally qualified health center that operates in Pettis, Benton, Morgan and Saline counties. Stewart estimates 30% of the center’s patients are uninsured. Medicaid expansion could bring that down to 10% by extending coverage to between 3,000 and 4,500 residents in the center’s four-county operating area, she said.
Although Tobler didn’t cite specific numbers, he said the same is true for Scotland County.
“On Medicaid expansion, we’re going to have fewer uninsured patients and more Medicaid patients,” Tobler said. “We’re already going to have more uninsured patients because unemployment and COVID relief. At least that (expansion) helps.”
Medicaid doesn’t cover all the costs associated with patient care, which is why Tobler doesn’t consider it the silver bullet in solving rural health care’s financial woes.
Medicaid payments to hospitals vary, but averaged 90% of costs in 2013, according to a report from Kaiser Family Foundation. States that expanded Medicaid showed a decrease in costs related to uninsured patients, which Tobler, despite being fiscally conservative in his politics, said speaks in favor of the issue.
Some compensation, he said, is better than none.
“When we have a margin that’s always in the negative numbers, more negative numbers don’t help,” Tobler said.
The primary criticism of expansion is the costs associated with insuring 230,000 more Missourians.
“We certainly realize there are concerns of ‘how do we fund this?’” Ahrens said, adding his organization is, and always has been, advocates for Medicaid expansion, even in light of the possible costs involved.
Stewart, however, is not convinced that the costs are excessive.
“I don’t buy that,” Stewart said. “I think it generates fear. In the environment that we’re in right now I can see how much people would be fearful because of the state budget deficit, but I actually think it might help the state budget situation if we went forward.”
States that have expanded have spent more, but revenues also increase with federal matching dollars and greater spending overall on health care, she said.
“When you look at your bottom line your bottom line ends up at zero,” Stewart said. “That’s what we’ve seen happen in other places.”
OTHER BENEFITS
But it’s not just about the bottom line. Ahrens, Tobler and Stewart all believe providing quality health care to their communities to be a public service.
“We think this more about meeting that mission of meeting our community and getting to those folks that are impoverished,” Ahrens said.
Not only that, but balancing that mission against the patient’s financial well-being is difficult for physicians.
“Their way of thinking is really to do the right thing every time,” she said. “When they are having conversations with patients who say they can’t afford it, it’s an impossible situation.”
Many practitioners are in favor of the expansion amendment even if they differ on how exactly it should work, she said.
“I do think there is absolutely a broad consensus that having fewer uninsured people would make the job of health care provider easier,” she said.
Likewise, Tobler believes Medicaid expansion could provide a much-needed morale boost for already stressed health care workers.
“You work awfully hard to take care of these patients,” he said. “I think anyone who works hard, no matter what they do, and don’t get recognition of that — it’s just demoralizing.”