Small-Town Hospitals Are Closing Just As Coronavirus Arrives In Rural America

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By this time next week, Decatur County, Tenn., will have lost its only hospital, Decatur County General, which has been serving the rural community of about 12,000 people along the Tennessee River since 1963.

The hospital's human resources director, Melinda Hays-Kirkwood, has already begun laying off people, and she says by next week only a skeleton staff will remain.

"It's hard on these employees that have been here a long time. I've got people who have been here for 30 years," Hays-Kirkwood says. "For some people, this has been their only job out of college."

The closure will have a huge economic toll locally — with more than 100 on staff, the hospital was one of the county's largest employers. But the ironic timing isn't lost on its staff either. Because of the COVID-19 crisis, most nonessential businesses in the area were already closed.

"It's a difficult time to be shutting down a hospital in the middle of the coronavirus," Hays-Kirkwood says.

There are currently no known cases in Decatur County, but she says every county around it has reported infections.

Small-town hospitals were already closing at an alarming rate before the COVID-19 pandemic. But now the trend appears to be accelerating just as the disease arrives in rural America. When Decatur County General Hospital shuts down indefinitely by April 15, it will be the ninth small-town hospital to close in 2020 alone. According to a report released this month by the Chartis Center for Rural Health, nearly half of rural hospitals were already operating in the red before the COVID-19 crisis.

"That idea of a perfect storm — that gets overused, but that's actually what's happened," says Allan Jenkins, an economics professor at the University of Nebraska at Kearney.

Jenkins says small-town hospitals have struggled to stay open because of perennial challenges facing rural America, such as depopulation and demographics.

"Because rural communities tend to be older and poorer and sicker and less likely to be insured, high-deductible insurance policies are very hard on rural hospitals," he says.

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One recent analysis estimated that treating just one uninsured COVID-19 patient who has to be hospitalized could cost at least $40,000.

In a letter this week to congressional leaders, the National Rural Health Association lobbied for "immediate relief" for rural hospitals, warning that hundreds are on the verge of closure.

The Trump administration has indicated that hospitals across the U.S. will be eligible for federal aid to cover those costs, but it's yet unclear where exactly that will come from. The NRHA says the money should come in a likely future stimulus bill or out of a $100 billion public health emergency fund earmarked in a coronavirus relief bill signed by President Trump late last month.

"The loss of revenue over the last few weeks due to the inability to provide non-emergency care is destabilizing core health services in rural America," the NRHA said.

The group cited Blaine County, Idaho, as a glimpse into the future as the coronavirus spreads into rural America. The small 25-bed hospital there is overwhelmed with patients. The county, which includes the Sun Valley Resort, recently had the highest rate of infections in the U.S., and patients had to be transferred to larger regional hospitals that had begun seeing their own rise in cases.

Health policy experts say a rural hospital's ability to stay open through the coronavirus pandemic may depend in part on whether the state it's in has expanded Medicaid. Idaho has, but Tennessee, where Decatur County General is slated to close, has not. Federal reimbursements to rural hospitals in non-expansion states have dropped steeply since the 2010 Affordable Care Act. It's another big driver behind the recent wave of closures, according to Jenkins, the economist. Rural hospitals in states that have expanded Medicaid are seeing significantly more federal money.

State and federal regulations and mounting debt are the primary factors being cited for the pending closure of Decatur County General Hospital. Medicaid expansion was proposed in Tennessee by Republican lawmakers earlier this year, though the effort has reportedly stalled.

Hospital officials say there is some hope that Decatur County General's closure will be temporary. For now, after next week, locals needing emergency or other care will have to travel at least 20 miles or so to the next nearest facility.

Hays-Kirkwood, the HR director, says Decatur County and its water sports and off-road trails are a beacon for recreation enthusiasts. And her hospital's emergency services have saved a lot of lives in recent years.

"From a health care perspective, there will be many that won't be able to get to a hospital in time," Hays-Kirkwood says. "It's just going to be a tough situation."