As rural hospitals continue to struggle financially, a new category of hospital is gradually becoming established, especially in the Southeast.
Rural emergency hospitals get more than $3 million in federal funding yearly and higher Medicare payments in exchange for shutting down all inpatient beds and providing 24/7 emergency care. While this makes it easier for a hospital to stay open, experts say it doesn't address all the challenges rural healthcare faces.
Individuals may have to travel farther for treatments for illnesses that require inpatient stays, like pneumonia or COVID-19. In some communities where hospitals have transitioned to the new designation, residents are uncertain about the type of care they can receive. Additionally, rural hospitals are reluctant to make the switch due to the absence of a safety net.
"It's ironic" that the facilities that may need the most help can't afford to take the risk, remarked Carrie Cochran-McClain, chief policy officer at the National Rural Health Association. She highlighted the necessity to give up certain services and advantages, such as a federal discount program for prescription drugs.
The government, which categorizes hospitals by type, introduced the rural emergency option in January 2023. Only 19 hospitals across the U.S. obtained rural emergency hospital status last year, according to the University of North Carolina's Sheps Center for Health Services Research.
The majority are located in the South, with some in the Midwest, and hospitals in Nebraska and Florida have recently begun to explore this option.
The designation is targeted at a very specific population, explained George Pink, deputy director of the Sheps Center's Rural Health Research Program, and that's rural hospitals on the verge of closure with few people already receiving inpatient care.
Saving rural care
That was the situation for Irwin County Hospital in Ocilla, Georgia, which was the second rural emergency hospital established in the U.S.
Weeks before the conversion, the hospital received at least $1 million in credit from the county in order to pay employees – money that county board of supervisors chairman Scott Carver questioned whether he would get back.
"We operate on a $6 million budget for the county, so to extend that kind of line of credit was risky on our part to some extent," he said. "But … we felt like we had to attempt it."
Irwin County Hospital became a rural emergency hospital on Feb. 1, 2023. Quentin Whitwell, the hospital's CEO, stated that it was an ideal candidate.
"We're still discovering some of the impacts, given that it's a new initiative," commented Whitwell, who owns and manages six hospitals in the Southeast through his company Progressive Health Systems, most of which are rural emergency hospitals or have applied for the designation. "But the transition to a rural emergency hospital has completely changed this hospital."
A combination of state programs and tax credits, in addition to the new designation, has left the hospital with $4 million, according to Carver. In short, it was worthwhile to him.
Traci Harper, a long-term resident of Ocilla, isn’t very certain. Around a year ago, she hurried her son to the hospital for urgent care for spinal meningitis.
Since the new classification mandates the hospital to move patients to larger hospitals within 24 hours, Harper’s son was transferred to another in-state facility and three days later received the necessary care in a hospital in Jacksonville, Florida.
“That’s two hours away,” she said. “The whole time I could have taken him there by myself, but nobody informed me about that.”
‘Barely surviving’
Nebraska’s initial rural emergency hospital was inaugurated in February in a city named Friend.
Warren Memorial Hospital had reached a critical point: Federal pandemic relief funds had run out. The city, which possesses the hospital, had to start extending lines of credit so hospital workers could receive their salaries. A significant street renovation project was even postponed, stated Jared Chaffin, the hospital’s chief financial officer and one of three co-CEOs.
“Back in the summer, we were barely making it,” said Amy Thimm, the hospital’s vice president of clinical services and quality and co-CEO.
Though residents voiced worries at a September town hall about ceasing inpatient services, the significance of having emergency care surpassed other concerns.
“We have farmers and ranchers and people who don’t have the time to drive an hour to receive care, so they’ll simply go without,” said Ron Te Brink, co-CEO and chief information officer. “Rural healthcare is exceedingly crucial for several Nebraska communities like ours.”
The initial federal payment, around $270,000, arrived on March 5. Chaffin anticipates the hospital’s earnings will be $6 million this year — more than it’s ever made.
“That’s just unbelievable, especially for our small hospital here,” he said. “We still have a huge challenge ahead of us, and we still have a lot of work to do. The classification alone is not a savior for the hospital — it’s a crucial support system.”
Rural challenges
That crucial support system has proven challenging to maintain for Alliance Healthcare System in Holly Springs, Mississippi, another one of Whitwell’s hospitals and the fourth facility in the country to convert.
Months after being authorized as a rural emergency hospital in March 2023, the Centers for Medicare and Medicaid Services withdrew its decision.
Hospital CEO Dr. Kenneth Williams informed The Associated Press that the government stated the hospital isn’t rural because it is less than an hour away from Memphis. A CMS spokesperson said the facility was “inadvertently certified.”
The hospital has until April to transition back to full service, but many in the community of largely retirees believe the hospital has closed, Williams said. Patient volume is at a record low. If the federal payments stop coming, Williams isn’t sure the hospital will survive.
“We might have been closed if we hadn’t (become a rural emergency hospital), so … something had to be done,” he said. “Do I regret all of the issues that for some reason we’ve incurred that the other (hospitals) have not? I don’t know.”
Though Alliance seems to be one of few facilities that have been adversely affected by converting to a rural emergency hospital, Pink said it’s too early to know if the federal designation is a success.
“If I'm right, it might work well for some communities and not so well for others,” he said.
Cochran-McClain mentioned her organization is working with Congress to alter regulations that have been a barrier for rural facilities, such as closing inpatient behavioral health beds that are already scarce.
Brock Slabach, the National Rural Health Association’s chief operations officer, told the AP that more than 30 facilities are interested in converting to rural emergency hospitals this year.
According to Whitwell: “As this program develops, more people will likely recognize the value.”
