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Posted on Apr 9, 2019

Feds set rural hospitals on shaky ground: Column

By Dr. Roger Stark, Washington Policy Center

For the past few decades, rural hospitals in Washington state and throughout the nation have experienced financial difficulty. Many hospitals have seen a decrease in the number of patients and a de-crease in insurance payments, resulting in financial distress. A recent report from Navigant Consulting reviewed 2,000 hospitals nationally and found that at least one in five rural hospitals is in danger of closing.
These hospitals have faithfully served their communities, providing timely health care services, jobs, and an economic resource. Of the 430 rural hospitals identified as high risk in the recent report, 64 percent are seen as essential to their respective communities.
From a historic perspective, many if not most rural hospitals were originally financed through the 1940s-era Hill-Burton Act. President Truman wanted easy accessibility to health care for all Americans. Congress passed the Hill-Burton Act in 1946 to provide federal grants and guaranteed loans to communities to build hospitals. These communities were required to build facilities that contained 4.5 beds per 1,000 residents and to provide charity care.
The Hill-Burton Act not only firmly entrenched the government in the country’s health care delivery system, it eliminated or severely reduced hospital competition in any given community. Why would anyone try to compete against a Hill-Burton-funded facility by opening a new hospital or clinic in a rural area?
The Medicare and Medicaid entitlements began in 1965, and hospitals, especially in many rural com-munities, became dependent on payments from these government programs. From the inception of these programs, demand for health care has far outweighed supply. To control costs the government has gradually decreased hospital and doctor payments over the past few decades. This has disproportionally affected rural hospitals compared to urban facilities.
Health care has also become much more sophisticated than it was in 1946. The treatment of heart attacks, strokes, trauma, and high-risk pregnancies, to name only a few medical conditions, is now very specialized and requires a level of staffing that rural hospitals cannot provide. In addition, rural communities face a fundamental problem of finding primary care doctors, let alone specialists, to staff their hospitals.
Congress has recently considered legislation to provide more taxpayer subsidies, even though government created many of the problems these rural hospitals now face. Hospitals have found that relying on federal payments only leads to cuts later. The policy issues are whether federal taxpayers should subsidize these rural hospitals and whether patients are best served by receiving care in these facilities.
Since the Korean War, the American military has had a vast experience with rapid transport of injured soldiers to major trauma centers. This system has been upgraded and refined with the wars in the Middle East. Medical emergencies in the civilian population, such as heart attacks and strokes, could be handled in a similar fashion, with patients quickly transported by air and land.
Further, telemedicine is playing a greater role in health care and provides many patients with timely access to primary care, especially in rural settings. A local clinic with telemedicine capabilities that is affiliated with a major medical center can now often substitute for in-person doctor visits.
Emergency transport and telemedicine do not preclude a small community from funding its own hospital. Likewise, if the residents of a small town feel strongly about having a doctor available in-person, one solution would be to finance that physician’s medical training in exchange for a specified number of years of service.
Forcing distant federal taxpayers to finance rural hospitals that they will never use is bad public policy and potentially very costly. In addition, it may not be in the best interest of rural patients themselves. Local communities, in association with major medical centers, should seek less costly and more comprehensive health care solutions.

Dr. Roger Stark, MD, FACS, is a retired physician and currently the health care policy analyst at Wash-ington Policy Center. He is also the author of “The Patient-Centered Solution: Our Health Care Crisis, How It Happened, and How We Can Fix It.” He can be contacted at