A Tale of Two Hospitals; One Survived, the Other Didn’t

A state line and 24 miles are all that separate two rural hospitals in Kentucky and Tennessee. The Kentucky hospital is still in business. The Tennessee one isn’t. One difference: Kentucky expanded Medicaid while Tennessee didn’t.

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Between 2013 and 2017, 64 rural hospitals across the country shut down, more than double the rate of the previous five years. More than half of closures since 2010 were in the South, where most states have chosen not to expand Medicaid, as allowed for under the Affordable Care Act.

One such hospital was Cumberland River Hospital in the Middle Tennessee town of Celina, population 1,463, where Natalie Boone serves as director of Clay County Emergency Medical Services. On March 1, the hospital ceased to be.

About two and a half years ago, Boone’s mother, Marilyn Boone, was ailing. She’d been sick for a couple of days and thought she might have an ear infection. She took a nap, and woke up disoriented. Her vision was blurred and she was unable to raise herself out of bed. She now thought she was having a stroke.

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Marilyn lived on the square in downtown Celina. An ambulance arrived within minutes. But by the time they reached the hospital, she was completely unresponsive. The ER doctor intubated and stabilized her. She was flown to Vanderbilt University Medical Center in Nashville.

After four days in the ICU on a breathing machine, Marilyn awoke. She has no aftereffects today aside from some minor hearing loss. The diagnosis was bacterial meningitis from an ear infection.

“There are so many people in this county walking around today simply because we as EMS were able to get them [to the hospital] or they were able to get there in a private vehicle,” Natalie Boone says.

The Vanderbilt doctors told Boone that had it not been for their colleagues at Cumberland River recognizing what her mother was experiencing and immediately administering antibiotics, she would either be dead or very seriously impaired.

A state line and 24 miles are all that separate two rural hospitals in Kentucky and Tennessee.

Cumberland River Hospital saved lives, but it also played a critical role in the survivability of the town of Celina. About 100 full-time jobs were lost with its closure, and Boone notes that a town without a hospital is not likely to rank high with a corporation scouting locations for, say, manufacturing facilities, satellite offices or a call center.

Clay County advertises itself as the “Gateway to Dale Hollow Lake,” an attractive location for a vacation or retirement home. For many, especially retirees, the absence of a local hospital is a serious deterrent.

Earlier this month, some hopeful news arrived with the announcement that Johnny Presley, a physician assistant who operates medical clinics in other rural Tennessee communities, had purchased the hospital from the previous operator, Cookeville Regional Medical Center, for $200,000. (CRMC purchased the hospital in 2012 for $6 million.)

Presley has said he plans to reopen the hospital in phases, beginning with a clinic. County residents certainly welcome any services that can be restored. But the new owner will face the same challenges as did the former owners – as do most rural hospitals.

A North Carolina Rural Health Research and Policy Analysis Center study underscores those challenges. Patients at small, rural hospitals tend to be relatively older, poorer and sicker, with a higher percentage covered by Medicare or Medicaid or who have no insurance at all. Rural hospitals are subject to Medicare reimbursement cuts if they’re unable to meet certain technology standards, but often don’t have the capital to make the necessary changes.

Boone, a Clay County native, acknowledges that she’s no expert on hospital administration. But she does believe that assistance from the Tennessee Legislature might have precluded the hospital’s closure: “Do I think Medicaid expansion could have helped? Absolutely.”

To support her assertion, she points 24 miles up the Cumberland River, across the state line, to Burkesville, Kentucky, and Cumberland County Hospital – a similarly sized hospital in a community with roughly the same number of residents, with approximately the same per-capita income and number of people living in poverty, likewise with a challenged economy – which is serving its community well.

Kentucky is a Medicaid expansion state.

A Healthy Partnership

In both 2017 and 2018, Cumberland County Hospital was selected as a top 100 critical access hospital. “Critical access hospital” is a designation given by the Centers for Medicare & Medicaid Services to hospitals that have 25 or fewer acute-care inpatient beds, have an average length of stay of 96 hours or less for acute-care patients and provide around-the-clock emergency services.

Cumberland River Hospital was likewise a CAH.

On the left, Rick Neikirk, CEO of Cumberland County Hospital. On the right, Rick Capps, CFO of Cumberland County Hospital

Asked what Medicaid expansion has meant to Cumberland County Hospital, CFO Rick Capps says, “Survivability.” He acknowledges, though, that expansion alone isn’t enough.

A nonprofit owned by shareholders in the county, Cumberland County Hospital has diversified quite a bit over the past decade. The system now includes two rural health clinics, a pharmacy and a nursing home.

The hospital system is the number-one employer in the county, with about 340 people on its payroll.

A decade ago, the practices of two physicians, Robert Flowers and Sam Rice, both of whom have been working in the county for more than 30 years, were incorporated into the hospital system.

That partnership, says CEO Rick Neikirk, has been key to the hospital’s success.

“They recognized five to 10 years ago that health care was going to be a very tough nut for them to practice on their own in a private setting,” he says. “So we’ve been able to build a good partnership with them…. It’s a symbiotic type of thing.”

“They had the well-being of both the community and the hospital at heart and had for a long time,” Neikirk says. “They know the benefit of keeping the hospital here.”

“They staff our emergency room,” Capps adds, “they make rounds at the hospital; they’re hospitalists.” After admitting a patient, they follow through with that patient’s care.

Specialists rotate in on a weekly basis to provide cardiology and pulmonary care and orthopedics.

A message from the Rural Assembly

“We’re good at what we do,” Neikirk says. “The things that we know we can do, we do. Those things that are beyond us, we’re intelligent enough to know to send people on to where they can get the help that they need.”

Revenue diversification, Capps emphasizes, is another primary factor in Cumberland County Hospital’s success: the rural health clinics, pharmacy and nursing home.

Bottom line, staying viable has required creativity, and Medicaid expansion has advanced the hospital’s initiatives. With far fewer uninsured patients now entering their doors – a lighter burden of uncompensated care – the hospital has more flexibility to deviate from the standard model.

“We embraced [Medicaid expansion] when it occurred,” Neikirk says. “When we knew it was coming, we revamped our business office to take advantage of it. We trained people to be connectors … we were very proactive.”

Expansion, he avows, “was the right thing for Kentucky. It was the right thing to do.”

A Positive Impact

According to a 2018 Kaiser Family Foundation review of studies and reports by government, research and policy organizations, Medicaid expansion has “positively affected access to care, utilization of services, the affordability of care and financial security” among low-income populations.

Studies have shown “a positive association between expansion and health outcomes” and that expansion results in “reductions in uncompensated care costs for hospitals and clinics.”

“Multiple recent analyses demonstrate that Medicaid expansion is having a disproportionately positive impact in rural areas in expansion states, where growth in Medicaid coverage and declines in uninsured rates have exceeded those in metropolitan areas in expansion states and both rural and metropolitan areas in non-expansion states.”

And a 2018 study from the Colorado School of Public Health found that hospitals are six times more likely to close in non-expansion states. The researchers write that improved hospital performance associated with expansion was most particularly pronounced in rural communities.

Beyond the repercussions to health care, rural hospitals are often the biggest employer in their communities.

Natalie Boone

Natalie Boone recalls when Oshkosh, the children’s clothing brand, drove Clay County’s economy. The company once had three plants in the county, but pulled out in the 1990s. “That had a tremendous impact on this county,” she says. When Cumberland River Hospital closed, it and the school system were the largest employers: 146 full- and part-time jobs were lost.

There had been rumors over the years that the hospital might close, Boone says. “Just rumors.” City officials, she says, were blindsided by the announcement. The community has reacted with “a lot of fear, a lot of anger about the way it’s been handled, a lot of concern.”

Paul Korth, CEO of former owner and operator Cookeville Regional Medical Center (Cookeville is 40 miles south of Celina), says the administration tried a number of things to keep the hospital open, “but with a low patient volume, the increased cost in health care and the lack of physicians up there, it just became a difficult thing.”

Recruiting doctors was an issue, Korth says. Cumberland River was down to two physicians on staff.

“We studied it probably for a good two years, what we were going to do, before we had to close,” he says. The administration considered running it as an outpatient center, a standalone emergency room or a federally qualified rural health clinic. “We looked at all the different options that we could have there,” none of which, Korth says, were economically viable.

He acknowledges that Clay County needs medical services “to take care of patients and stabilize them and get them to the appropriate place.”

Boone says that while hospital administrators claim that there are three emergency departments within a half-hour drive of Celina, “that’s only if you’re sitting on a state highway.” Many people in the county live well off two-lane roads.

“Even getting to the local hospital meant 20 to 25 minutes minimum from some of those areas in the county,” she says.

Johnny Presley, Cumberland River’s new owner, has said that phase two of restoring services will be reopening the emergency room. Boone will certainly welcome that. At the time of the closure, she said she anticipated an increase in 911 calls, “because people who were OK to drive 10 minutes to the local hospital are not going to feel comfortable driving an additional 20 minutes.”

She expected call times to double and for there to regularly be times when neither of her two ambulances would be immediately available.

As for what Medicaid expansion might have meant to Cumberland River Hospital, Korth says, “It would have helped, no question,” though he doesn’t believe it would have kept it open.

As for whether Tennessee will expand Medicaid, he says, “I don’t think so. No.”

‘Having a Tough Time’

Most everyone concerned agrees that rural America needs new and innovative health care delivery models – that business as usual will mean an accelerating rate of hospital closures.

One such option is the Pennsylvania Rural Health Model. Another is the Maryland Total Cost of Care Model.

“I think desperation is the mother of invention,” says Brock Slabach, the National Rural Health Association’s senior vice president for members services. “I think we’re seeing a lot of pain being expressed across the country, and I think more and more legislators are starting to become aware of that and are starting to respond.”

What that will mean for Medicaid expansion is very much an open question. The future of the Affordable Care Act is uncertain, and with it that of Medicaid expansion. A federal appeals court in New Orleans will be considering whether the ACA in its entirety should be deemed unconstitutional. The case may well ultimately be decided by the Supreme Court.

In Kentucky, the state was blocked by a federal judge from instituting a work requirement to Medicaid. Governor Matt Bevin has threatened to scrap expansion if not allowed to introduce the requirement.

Meanwhile, neighboring Tennessee has had the second-most rural hospital closures, after Texas, in the country. It was announced in June that Jamestown Regional Medical Center, the only hospital in rural Fentress County, just 45 miles from Celina, had closed its doors.

“I’m sorry for them,” Cumberland County Hospital’s Rick Neikirk says of his neighbors to the south. “Tennessee’s having a tough time.”

A message from the Rural Assembly

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