Virginia’s rural hospitals aren’t healthy
As we discuss government’s role in health care in this country, one problem increasingly stands out needing immediate attention: the state of medical care in our rural areas, including in Virginia.
Rural hospitals play a unique role in the communities they serve. They are not just crucial to the well-being and health-care needs of local residents; they also are among the leading economic drivers in their regions. According to the Virginia Hospital and Health care Association ( VHHA), in 82 percent of Virginia’s rural counties, health care is among the top five largest employers.
Virginia’s rural hospitals directly employ more than 17,000 workers, the VHHA reports. These are jobs that pay well above average wages and have historically offered stable employment and advancement up the economic ladder.
Beyond their own economic activity, rural hospitals enhance the ability to develop economically. When choosing a community, employers view the presence of a hospital as a signal of the area’s strength and rely on hospitals to help them maintain a healthy and productive workforce.
Despite their outsize importance, both medically and economically, rural hospitals are battling the toughest fiscal environment they have ever encountered. According to the North Carolina Rural Health Research and Policy Analysis Center, almost 50 rural hospitals have closed nationally in just the past four years. Here in Virginia, one of our rural facilities closed in 2013. The financial outlook for our other hospitals is daunting.
Nearly half of Virginia’s rural hospitals had negative operating margins in 2012, the VHHA says, and more than 20 percent have a negative net worth. Our rural hospitals expect to be paid in full by only 1 in 5 patients they see. Most patients at our rural hospitals are covered by Medicare, which already pays only about 90 percent of a hospital’s cost of care.
Now, our hospitals face nearly $1 billion in direct cuts to Medicaid and Medicare in 2015 and 2016, with no end in sight to such reductions. For Virginia’s rural hospitals, the situation is serious, and it is only growing more difficult by the day. The VHHA estimates that with these cuts operating margins at our rural hospitals will fall to zero by the year 2022.
In the face of these challenges, rural hospitals continue to faithfully adhere to their solemn obligation to provide service to anyone who comes through their doors. That care is provided regardless of whether the person can pay. They strive to meet the needs of their communities and, as a result, nearly every Virginian is within 20 miles of a fully functional hospital that is open 24 hours a day, seven days a week, 365 days a year.
Of course this commitment creates very real financial pressures that other businesses do not confront. But that care is crucial to the success of economic development and job creation in the commonwealth. Businesses simply cannot be expected to open in communities that lack health-care infrastructure. If we are serious about ensuring the economic vitality of our rural communities, a major component of that effort must be ensuring they retain excellent hospitals that are accessible and affordable.
While Virginia has many different regions, and those regions have many specific needs, we cannot stand by and watch some areas move forward as others fall back. Our rural hospitals face the same challenges as their counterparts nationally, and it is incumbent on those of us in state government to find the policy solutions necessary to address these challenges.
While we can argue about specific policy details, the reality is our rural hospitals need serious, immediate financial help. They face a situation that is only growing worse. Medicaid expansion would be the simplest and most financially sensible course. I continue to advocate strongly for it. But I also continue to urge all lawmakers to look for any means by which we can provide the financial support our rural healthcare providers need to continue to serve the Virginians who depend upon them every single day, in every single community.