Rural Hospital CEOs Call for Medicaid Expansion
A group detailed to Gov. Roy Cooper the problems they have keeping their doors open and bills paid.
At a roundtable meeting April 24, CEOs of rural North Carolina hospitals explained to Gov. Roy Cooper and state Health and Human Services Sec. Mandy Cohen that expanding Medicaid would help their institutions keep the doors open.
There were some common elements to all their stories. For starters, all of their hospitals are operating on thin margins.
The group nodded in agreement as each talked about excessive use of their emergency departments and the uncompensated care resulting from ED patients who were uninsured or unable to pay.
Adding to their problems, many said they have a difficult time recruiting medical professionals, and that their counties are turning into “doctor deserts.”
The consensus was that Medicaid expansion wouldn’t solve all their problems overnight, but they agreed it would go a long way to relieving pressure on their emergency departments and create a healthier patient population.
“We can talk about the present, but we really need to talk about where we are going to be in three to five years,” Chris Lumsden, CEO of Northern Hospital of Surry County, told the group. “This issue is monumental to us. [Medicaid expansion] is something we can do today that will impact patient care and economic development down the road.”
In North Carolina, there have been six rural hospital closures since 2010. Across the U.S., there have been 104 closures during that same time, according to data compiled by the UNC Sheps Center for Health Services Research.
Cohen said that 80 percent of the hospital closures nationwide occurred in states that didn’t expand Medicaid.
The CEOs’ pleas have some backing from the research. Greg Tung, a health economist from the University of Colorado, found in his research that Medicaid expansion has had a positive impact on hospitals’ financial situations and that they were less likely to close their doors.
Rural hospitals are most at risk for closure in states that did not expand, he said.
“Rural hospitals tend to be in a more financially precarious situation compared to urban hospitals,” Tung told NC Health News.
He said this has a trickle-down effect to the rural economy surrounding each institution.
“Rural hospitals are anchor institutions in their communities. They are kind of a pillar of the local community and the local economy, they provide a lot of skilled, well-paying jobs for that area,” he said. “So when a rural hospital closes, it has a disproportionately large impact on that community, especially in comparison to an urban hospital closure.”
Lumsden said the financial stability of his hospital is vital to the health of the surrounding economy.
Northern Hospital employs 900 people, not including physicians, and it’s one of the largest employers in the area.
“The issue of Medicaid expansion needs to be dealt with quickly,” Lumsden said.
Lumsden also brought up the large amount of uncompensated mental health care his emergency department provides. Currently, Northern Hospital averages 50 to 60 involuntary commitments a month.
“They are sequestered in the ER department for sometimes days,” he said. “They are complex, difficult patients. Very tough on staff. And we don’t get paid. We provide at least a million dollars of free care to [involuntary commitment] patients and that just adds to the dynamics.”
Michael Nagowski, CEO of Cape Fear Valley Health System, said he has one of the busiest emergency departments in the state with 140,000 visits a year to one ED. More than 20 percent of Cape Fear’s ED visits are uncompensated.
“We see the things that should be handled in the urgent care or primary care, but they won’t accept those patients,” he said. “If you don’t have a payer source, some people just don’t go until it’s a real emergency. Now we have a cost of care issue at another level.”
“And think about the human impact,” he said. “Let’s catch you before you’re diabetic. Let’s catch you before you have heart disease.”
Cohen echoed Nagowski’s remarks, pointing out that conditions such as high blood pressure are manageable with the right medications.
“What happens when you don’t take your blood pressure medicine is you end up in the emergency room with a stroke,” Cohen said. “And caring for a stroke is not only enormously expensive, but that person is not going back to work, certainly not right away.
“Now we’ve not only lost a worker for one of our businesses, but someone who is the breadwinner for their family, and now they are in medical bankruptcy,” she said. “And you have uncompensated care.”
Cohen said she often finds herself explaining to people with health insurance how Medicaid expansion will benefit them.
“It’s actually keeping the hospital doors open for them,” Cohen said. “But also keeping prices down for everyone who is lucky enough to get insurance through their employers.”
‘All of it is negotiable’
Nash UNC Health Care CEO Lee Isley said he’s in favor of Medicaid expansion because “it’s the right thing for the community,” but he had a concern.
According to his calculations, closing the coverage gap would bring Nash UNC about $10 million, but under some Medicaid expansion proposals, the state’s hospitals would take on 10 percent the cost in the form of an assessment. For Nash, that would come to about $7.5 million. He added that moving to Medicaid managed care will likely cost his institution about $1.7 million, bringing his hospital right back to breaking even.
Isley told the governor that hospitals should take on part of that assessment, but he asked if it would be possible to share the cost with other health care entities.
Cooper said he was looking into putting some of that cost on insurance companies.
But does Medicaid expansion have a chance in North Carolina?
Cooper said there are enough votes to pass a GOP-backed version of expansion in the state House right now if the Republican leadership would bring it to the floor for a vote.
He expressed less confidence about prospects in the state Senate.
“Obviously the leadership of the Senate has some concerns about this, but we hope that all of it is negotiable,” he said. “It’s so important for us to take this step here in North Carolina.”
Some have expressed fear that the federal money to expand Medicaid might disappear, but Cooper said he doesn’t think it will. People in Washington D.C. have been trying to do away with these policies for the past two years and have not succeeded, he said.
“They couldn’t kill it,” he said. “One, because people need health care. Two, because Republican and Democrat governors in states that have expanded came to Washington and said, ‘This is working. Don’t take this away.’
“Plus you can write safeguards into the legislation that can stop coverage if the federal money dries up,” Cooper said. “But I don’t see this happening. If it didn’t happen in the last two years, it’s certainly not going to happen any time soon in a divided Congress.”