When 'Critical Access Hospitals' Aren't So Critical
Hood Memorial Hospital, in Amite, La., hasn't been full in at least two decades. Some people say that makes it's a perfect target for efforts to reduce federal spending.
On an average day, fewer than four of the hospital's 25 beds are occupied. Last year, Hood posted a $700,000 loss on its $7.5 million in total operating expenses. One of the few bright spots on Hood's balance sheet: the extra money it receives from the federal government through a program for critical access hospitals — small facilities that receive a higher Medicare reimbursement rate to help keep them afloat.
In the ongoing deficit reduction talks, critical access hospitals have been singled out at least twice as a program ripe for cutting: in President Obama's budget proposal and by the Congressional Budget Office.
The program was created by Congress in 1997, after a wave of rural hospitals closures, to make sure Americans in isolated areas would still have access to health care. Hospitals with 25 or fewer beds that are at least 35 miles away from another facility, or 15 miles across secondary roads, qualify. The Medicare Payment Advisory Commission estimates that in 2003, these hospitals were paid an average of $850,000 more than they would have been without the CAH designation.
But there was also a loophole: States could waive the distance requirement — and they did. Today more than 1,300 U.S. hospitals — nearly one in four acute care facilities – are designated as critical access.
Congress eliminated the exception in 2006. But the program grandfathered in hospitals like Hood — which is located in a small town, but within a 26-mile radius of at least four other hospitals.
When I visited in November, Shirley Holden, 78, was an inpatient at Hood being treated for dehydration. She's been coming since the hospital first opened in 1971 and argues that seniors in Amite need a hospital in town because "a lot of us just can't afford to hire someone to take us to another hospital, and all of our families work." If the hospital closed, she says, "mostly I'd stay at home. I would not be going to North Oaks or anywhere else unless I went on a stretcher."
North Oaks Medical Center, 22 miles away, is the threat to Hood's financial stability. It's a booming hospital complex packed with 2,400 employees and a healthy profit margin. And it's getting bigger: A $200 million construction project will add another 79 new beds and 14 new operating suites. Those kinds of resources make it attractive to area patients, says Michele Sutton, executive vice president at North Oaks.
"If they're having a heart attack, they're not going to stop at a local smaller hospital without an open heart program or a cath lab," she says. "They're going to come straight here."
Gail Wilensky, former administrator of Medicare and Medicaid, says the critical access program remains valuable, but it needs to be trimmed back because of hospitals like Hood.
"What started out as a reasonable concept has morphed into a program that is providing funds to a financially stressed group of hospitals that are not, in any reasonable sense of the term, critically needed to stabilize care for their community," Wilensky says.
Even if Hood can keep its critical access funding, CEO Hoppie Jones says the hospital may close its doors. His problems are myriad.
"It's not any one thing," Jones says. "It's the uninsured, our inability to collect payments from patients, it's the tightening up of the funding on the federal and state side. It's a lot of variables, and all of them right now are working against us."
This story is part of a reporting partnership that includes NPR, member stations, and Kaiser Health News.
LINDA WERTHEIMER INSKEEP, HOST:
Pressure is building to find savings in Medicare, the health program for seniors. President Obama's health care law already calls for spending restraints and many budget proposals call for more.
STEVE INSKEEP, HOST:
Some lawmakers argue a program called Critical Access Hospital is ripe for trimming. Billions of dollars help to keep small hospitals open in areas that are not close to big facilities. Jenny Gold of our partner Kaiser Health News visited one hospital that could be a target.
JENNY GOLD, BYLINE: Hood Memorial Hospital first opened in the small town of Amite, Louisiana 40 years ago.
SHIRLEY HOLDEN: I was one of the first that ever came to Hood Hospital.
GOLD: Shirley Holden is 78 years old now, and still a loyal patient. In October, she spent a week at Hood Memorial while being treated for dehydration. She says she couldn't imagine going anywhere else, even though there are several other hospitals in the area.
HOLDEN: We just need a hospital here 'cause a lot of us just can't afford to hire somebody to take us to the other hospitals and all our families work. I would not be going to nowhere else unless I went on a stretcher.
GOLD: When I visited, Holden was one of only three patients checked in at the hospital. The trauma area was nearly empty, the 24-hour staff waiting ready to accept an emergency. The scene isn't unusual. On an average day, fewer than four of Hood's 25 beds are occupied.
CEO Hoppie Jones says the hospital hasn't been full in at least two decades, and has cut back all but the most basic health services.
HOPPIE JONES: This used to be our operating room and surgical wing back when we did surgeries.
GOLD: The rooms are used as storage now for medical equipment, extra beds and old incubators. Jones is a slight man with thinning grey hair, his face lined with the stresses of his monumental task: trying to keep the hospital's doors open, despite losing money 11 of the past 12 years.
JONES: Down in our area of the country and dealing with hurricanes, they always talk about Katrina being that perfect storm. And I kind of see that as what's going on with the hospital. It's not any one thing, it's the uninsured, it's our inability to collect from patients, it's the tightening up of the funding on the federal and the state side. It's a lot of different variables and all of them right now are working against us.
GOLD: One of the only bright spots on his balance sheet has been the extra money he receives as a critical access hospital. That's a small, rural facility that gets a higher Medicare reimbursement rate to make up for a smaller patient load.
The program was created to help isolated hospitals stay afloat, but it quickly expanded to include one out of every four hospitals in the country, including places like Hood Memorial. Gail Wilensky used to be the administrator of Medicare and Medicaid. She says the critical access program has gotten way too big.
GAIL WILENSKY: What started out as a reasonable concept has morphed into a program that is providing funds to a financially stressed group of hospitals that are not in any reasonable sense of the term critically needed to stabilize care for their community.
JOE POLOTZOLA: I wouldn't go to one of the hospitals around here if you killed me.
GOLD: That's Joe Polotzola, who owns a pottery shop in Amite, close to Hood. Like many people in town, he wants to be treated at a major center of care, not a small local hospital.
POLOTZOLA: Yeah, if you break your finger if you go to Hood, they will definitely put a splint on it. But do they have an orthopedic doctor there ready to set the injury if it needs a pin in it? Probably not.
GOLD: When Polotzola needed some tests done recently, he went straight to North Oaks Medical Center 22 miles away. It's a booming hospital complex packed with 2,400 employees and a healthy profit margin.
The 60-acre campus is so vast that Administrator Michelle Sutton gave me a tour on a golf cart. The hospital's only getting bigger.
MICHELLE SUTTON: We're getting ready to pull into our emergency department. As you can see we're undergoing construction, and we're adding a five-story wing.
GOLD: The $55 million expansion will add another 77 beds and 14 operating rooms to accommodate more patients.
Several studies have found that hospitals like North Oaks offer better quality and more efficient health care than critical access hospitals. That's one reason the idea of cutting funding for the program has been floated several times recently.
But Michael Rosko says counting on the savings could be premature. He's a professor at Widener University in Pennsylvania. He says if patients have to drive farther, they may wait longer to get their medications and care.
MICHAEL ROSKO: All these will result in patients being sicker when they arrive at the alternate hospital. So some of the savings and efficiency may be negated by increased health problems, which are getting more expensive to treat.
GOLD: Even if Hood Memorial Hospital doesn't lose its critical access funding, its future is still very uncertain. Hoppie Jones worries about what that will mean for his employees and for the citizens of Amite.
JONES: I see people if not every day, every week who probably would not be walking the streets today if this facility weren't here. We have saved many lives.
GOLD: And that's why Hood's not going out without a fight, he says. But after so many years of struggle, it might soon be time for a well-earned retirement.
For NPR News, I'm Jenny Gold. Transcript provided by NPR, Copyright NPR.