Stanley Feld M.D., FACP, MACE Menu


America’s Rural Hospitals Are Being Destroyed

Stanley Feld M.D.,FACP,MACE

There is no question the federal government must decrease the amount of
money it is spending on healthcare. It simply cannot sustain the increasing
cost of health care.

Instead of figuring out how to make the system more efficient and cost
effective, the Obama administration is slowly destroying assets that have been
built at great costs to society in the past.

One example is the community hospital systems in large cities and the
voluntary hospital in smaller cities.
The government has subsidized their
development with tax incentives and reconciliation paybacks.

In recent years rural hospitals have been failing because of decreasing
government reimbursement. Many service the poor and elderly with emergency care
and outpatient clinics.

  • The role and structure of rural
    hospitals is changing,
    but they continue to be important local and
    regional centers of health care activity.
  • Rural hospitals tend to depend
    more on Medicare and Medicaid patients.
  • Most rural hospitals are organized
    on a not-for-profit basis
  • Rural hospitals make an important
    contribution to rural economies; expansion and diversification of the
    services that they offer will be important in their survival.
  • The quality of care provided in
    rural hospitals is generally equal to that provided by urban institutions,
    with some exceptions.

The Department of Health and Human Services' Office of the
Inspector General has recommended that Congress allow the Centers for Medicare
& Medicaid Services to strip critical access designation from any hospital
that was brought into the program under a state "necessary provider"

Brian Jordan, a program analyst for OIG's Office of
Evaluation and Inspections in Chicago, said that nearly 1,000 of the
approximately 1,300 critical-access hospitals
in 45 states gained the "permanent exemption"
under the necessary provider designation. Congress closed the loophole in 2006,
but grandfathered in the hospitals.

that designation, Jordan said about 800 hospitals would not have met location
requirements in 2011 because they were too close to another hospital.”

The "necessary provider"
designation is withdrawn if two hospitals are within 15 miles of one another.
It is estimated that Medicare could save 1.3 million per year for every
hospital eliminated from the necessary provider program.  

The total cost savings from eliminating
these rural hospitals would be less
than the
amount of money all salaries of the CEOs and other healthcare executives of healthcare
insurance companies take from Medicare a year.

If there is a problem with rural
hospitals it is their inefficiency and waste. The inefficiency should be fixed.
If the government wanted to do something constructive it should help rural
hospitals fix the inefficiencies.

“necessary provider hospitals “never had to meet the distance requirements."

 Necessary provider hospitals get paid more
from Medicare than non- designated hospitals. As towns expand new hospitals are
build close to the older standing hospitals. 

Maybe having a rural hospital in a
small city will increase economic growth of the area? It attracts industry and
more jobs. Many communities need two rural hospitals.

Both hospitals receive necessary
provider status and increased payment.

 Alan Morgan, CEO of the National Rural Health
Association, blasted the report. He said the OIG report would kill rural health
and access to healthcare. The closing of 800 rural hospitals would also close
emergency services in local communities, eliminate rural health clinics, access
to mental healthcare and nursing home support.

Morgan said, OIG
viewed this with blinders on
, not looking at how healthcare is delivered in
rural America.

about access and this report is only about finances and not access. It is a spending and finance issue and we seem to
have forgotten the rationale for the creation of this program, which was an
access issue."

If the Obama administration is trying to help
seniors and the underprivileged it should study this decision more carefully. I
can only imagine the cost of the unintended consequences to all taxpayers.

I believe the Obama administration wants to
destroy the entire healthcare system and replace it with a single party payer

It is time to go after the real excess cost
drivers in the healthcare system. It is a mistake to destroy the infrastructure.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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