Missouri’s lack of Medicaid expansion could be ‘final straw’ for struggling hospitals
Rural hospitals are more likely to close in states such as Missouri that have not expanded Medicaid.
A recent report from the pro-Affordable Care Act organization Protect Our Care analyzed 84 rural hospital closures since 2010. It found 90 percent of those hospital closures were in states that had not expanded Medicaid coverage. Missouri remains one of the 14 states that hasn’t amended its program to cover people who earn up to 138 percent above the poverty line.
The government health insurance program for low-income and disabled Americans covers one in four adults in rural areas, according to the Kaiser Family Foundation.
Rural hospitals serve disproportionately poorer, sicker and older populations than their urban counterparts. They also serve fewer patients, and their profit margins are low.
“Rural hospitals have been facing significant threats for a number of years,” said Marjorie Connelly, spokeswoman for Protect Our Care. “What we’re seeing in states that expanded Medicaid — uncompensated care costs are down and those hospitals are finding solvency.”
Whether patients are insured or not can make a big difference in profits, according to Brock Slabach, vice president of the National Rural Health Association. This is especially true in places where people are less likely to have private health insurance through an employer, he said.
“Most rural hospitals are funded through government payers, Medicare and Medicaid,” Slabach said. “In many facilities, that could amount for as much of 80 percent of total revenues.”
Because their patient volume is small, the slightest tweak to revenue can mean success or failure, Slabach said. Cuts in federal and state funding, population loss in rural areas and an increasing popularity of high-deductible health plans mean many hospitals outside cities have seen earnings drop. According to the rural health association, nearly 700 hospitals in the United States — one third of the total — are at risk of closing.
Medicaid expansion isn’t the sole reason a hospital will survive, but it can serve as a lifeline to otherwise vulnerable hospitals, said Tim McBride, co-director of the Center for Health Economics and Policy at Washington University.
“If they had the opportunity to make a little bit more on their Medicaid they might be able to stay open, but if they look forward and they say, ‘Oh, we’re not going to have a Medicaid expansion,’ their board might just say, ‘We need to shut down, we don’t see any way out of this.’”
Out of approximately 70 rural hospital In Missouri, four have closed since 2010. The most recent closure, Twin Rivers Medical Center in Kennett, was announced just last week.
The hospital in Missouri’s Bootheel ceased operations on June 11. Patients are being redirected to another hospital, Poplar Bluff Regional Medical Center, more than an hour away.
“A lot of the hospitals that closed had other problems and were in places that had economic problems and were struggling already,” McBride said. “If they’re in a place that hasn’t expanded Medicaid, that’s the final hit.”
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