Idaho’s rural hospitals say Medicaid expansion might keep them from closing

Clearwater Valley Hospital in Orofino.
Clearwater Valley Hospital in Orofino.

Idaho’s small-town hospitals have their own reason to back Medicaid expansion: In some cases, it may keep their doors open.

After years of stalled debate in the Idaho Legislature, expansion will go to a statewide public vote Nov. 6. Among other arguments, proponents have urged Idahoans to consider that small, rural hospitals may have to close if they can’t start tapping Medicaid for their poorest patients.

Without expansion, “I don’t know that we would be here five years down the road,” said Lenne Bonner, president of Clearwater Valley Hospital and Clinics and St. Mary’s Hospital in the small towns of Orofino and Cottonwood. Her small health system also operates clinics in the sparsely populated region south of Lewiston.

The hospitals are where about 20,000 people can go for medical help. They’re two of Idaho’s 27 “critical access hospitals,” or CAHs. CAHs are small hospitals — Idaho’s have as few as 10 beds — in rural areas that are the only option for people living in a certain area.

“And that sounds dramatic, and ... I hate to even say that, but we have had three years in a row of a negative bottom line,” Bonner said. “I’m a finance person, so that scares me to death. And now I’m in the CEO position going, ‘It’s my ultimate job to make sure that we keep these hospitals in our communities, and without the reimbursement that we need to be able to operate, that’s going to be harder and harder to do.’ ”

At least 87 rural hospitals in the U.S. have closed since January 2010. That has left communities without the jobs supported by hospitals, without ready access to maternity wards for expectant mothers, and without an emergency room nearby to get someone help in the crucial early minutes of a heart attack.

But hospitals closing isn’t a new phenomenon. Medicare even pays more for care at “critical access hospitals” in rural areas because it’s harder to keep them afloat — and they’re sometimes the only hospital for hundreds of miles. Closures abated for a couple of decades before they came roaring back after the Great Recession.

Idaho has managed to keep all of its critical access hospitals alive since 2010. Many of them are owned or managed by larger systems.

For example, St. Luke’s acquired hospitals in McCall, Mountain Home and Jerome. The Boise-based health system returned two of the hospitals to public ownership to settle claims of unconstitutional tax deals, but it agreed to continue operating them for at least 25 years.

Bonner said if her hospitals were to close, patients may have to drive two hours to get to the nearest hospital.

‘Huge piece of the puzzle’

National researchers described cases where Medicaid expansion in other states aided small hospitals there.

“There is no question that hospitals are seeing less bad debt. Particularly rural hospitals have a lot to gain,” said Joan Alker of the Georgetown Center for Children and Families. “If you look nationally at where we’ve seen rural hospital closures, it’s been in states that have not expanded Medicaid.”

The Idaho Freedom Foundation, a critic of expansion, has also noted the connection, dubbing it an attempt by the industry to get “tax-funded subsidies.”

The Clearwater/St. Mary’s system is independent and employs about 250 people in each of its communities, Bonner said.

It provides $2 million of unpaid medical care annually — about 10 percent of its net revenue, she said. And it’s losing money despite efforts to cut costs.

“Last year, we lost over $500,000,” Bonner said.

If even half of the unpaid care was covered by Medicaid, it would mean the hospitals and clinics could break even or make enough of a profit to replace old equipment or add a new bay to the tiny ER.

“But primarily, those people would have better health, too, because they would go in for their preventative services, and they would have regular visits with their primary care physicians, which saves cost down the road, and it also allows for them to be healthier,” she said. “For example, a colonoscopy seems really expensive to somebody that makes $20,000 a year and doesn’t have any health insurance. But that could prevent colon cancer 10 years from now. ... So, $1,300 colonoscopy today versus hundreds of thousands of dollars later in cancer treatments and things like that.”

There are other stressors on rural hospitals like Bonner’s, but lack of insurance in high-poverty rural Idaho is a serious drain on the finances of small hospitals.

“Rural health care as a whole is getting tighter and tighter and harder and harder to stay alive,” Bonner said. “But this is a huge piece of the puzzle.”

Audrey Dutton covers health care for the Idaho Statesman. Reach her at (208) 377-6448 or adutton@idahostatesman.com or find her on Twitter at @audreydutton.
Melissa Davlin is the host of Idaho Reports on Idaho Public Television. Reach her at 208-373-7220 or find her on Twitter at @davlinnews.
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