Rural hospitals fear health care overhaul won't help them

WASHINGTON -- The Peach County Regional Medical Center, a small, Cold War-era hospital in Fort Valley, Ga., 40 miles from the nearest trauma center in Macon, is in critical condition.

Medical specialists and surgeons -- physicians who are hard to recruit to rural areas -- often take one look at the hospital's worn and soiled carpet and peeling wallpaper and decide to hang their shingles elsewhere.

The emergency room has only five beds, so when patients with serious injuries or illnesses are admitted other less critical patients must get out of bed and walk or are rolled to a nearby waiting room.

Most of those patients are uninsured and can pay little, if anything, toward their treatment, forcing the hospital to absorb the costs. When the hospital does receive payment, often from Medicare and Medicaid, the reimbursements are slow in coming and don't fully cover treatments costs.

"You live lean and make hard choices every day," said Nancy Peed, Peach County Regional's CEO and administrator. "That's why the carpet doesn't look good, that's why the wallpaper is old. When I have money I put it into health care, quality nurses and medicine. My chairs and waiting room may not look great and sometimes that's a turn-off for people. But we give great quality health care."

Physicians and hospital administrators at facilities in rural counties like Peach County are closely watching the health care debate now taking place in Washington.

Overhauling the system could offer a lifeline to hospitals, doctors and nurses that serve the nation's small towns and agricultural communities, they say. But they also fear that Congress might not provide either enough money or the right incentives to allow rural hospitals to cover their costs and recruit talented medical professionals. That, they fear, will make it nearly impossible for smaller hospitals to remains in business.

"Medicare underpays everyone for service right now," Peed said. "That's one of the things we're worried about. If they have a program like Medicare which underpays with millions more people (using the system) it will make it more difficult. There needs to be true reform, not just cuts to providers, or sticking everyone in a plan and underpaying providers."

As lawmakers hammer out a comprehensive healthcare reform package, Congressional Blue Dog Democrats, many of whom represent rural communities in the South and Midwest, are pushing for "rural health equity" with higher reimbursement rates for physicians and hospitals in areas of the country that struggle to recruit and retain health care providers. However, including that type of language in the final bill will require lots of negotiation, said Rep. Jim Marshall, a Blue Dog Democrat from Macon.

"Cash flow for rural hospitals is a challenge," Marshall said. "An awful lot of our decisions concerning reimbursement flow from decisions in the 80s and we use a big city hospital model for determining costs for what reimbursement rates should be provided. It's unrealistic to expect the same cost efficiencies in low volume rural hospitals that you can obtain in high volume urban hospitals."

Of Georgia's 159 counties, 109 are rural. Those areas of the state have more than two million residents and 67 hospitals, according to the state's Department of Community Health's office of rural health. There are more than 5,700 hospitals in the U.S., most of them concentrated in urban centers, according to the American Hospital Association.

Years of cuts in reimbursements for Medicaid -- the program that pays the medical expenses of impoverished residents -- have hurt rural hospitals badly, a Georgia state legislative study on rural health care found. Rural hospitals' revenues are declining, their patient loads are increasing and there is no money available to improve or expand facilities, the study found.

The problem feeds on itself.

With fewer doctors willing to open practice in rural areas, patients -- many of them uninsured or on Medicaid or Medicare -- crowd local, financially-strapped hospitals for everything from help monitoring diabetes to medicine for whooping cough. The hospital in turn has less cash available to buy state-of-the art equipment or pay potential doctors higher salaries as an incentive to work in an underserved area.

Often the hospitals operate in the red or are forced to close.

Before the nation's credit crunch, several larger banks had programs that allowed smaller hospitals to borrow money to make improvements. Now those loans are virtually impossible to get, said Greg Dent, president and CEO of Community Health Works, a non-profit organization that focuses on improving health care in central Georgia.

"These hospitals are in dire straits," Dent said. "They can't afford new equipment, they can't afford bricks and mortar. They're trying to build new hospitals and get financing but getting the initial financing can be tough."

Researchers at the Morehouse School of Medicine in Atlanta examined emergency room visits by uninsured people in rural Georgia and found that in counties without an adequate number of doctors' offices or clinics, uninsured emergency room visits are 33 percent higher than in areas with such facilities.

Nationally, rural hospitals are treating an increasing number of uninsured patients, largely through emergency room visits, and are struggling under the financial weight of uncompensated care, according to the National Association of Community Health Centers.

For the past five years, Peach County has struggled to raise money to build a new $27 million facility just 20 minutes north in Byron near Interstate 75, an area that has experienced greater population growth and is more likely to attract physicians. A feasibility study by the Dixon Hughes accounting firm found the hospital could stay afloat if it closed the old facility, made the move to a new location, secures loans and draws the number of physicians and patients predicted in the report.

So far, the hospital has just $2.5 million for the project.

"I hear the powers that be say we need regional health care systems, but those systems don't have room for people outside of the area," Peed said, adding that in the meantime, the Peach County hospital fills the void. "If I have someone who is sick with a stroke and needed neurosurgery, here we can get to them ahead of time and get them stabilized."