Alabama’s rural hospitals face a sickly prognosis. A whopping 88 percent are bleeding deficit ink and more than a dozen seem likely to shut within two years.
But some state lawmakers hope to find deliverance in the form of the $867 billion federal farm bill. For the first time in the farm bill’s history, there’s a section directly addressing rural health concerns.
“No question we are motivated to stabilize rural hospitals. And tools to do that in the new farm bill will be used as soon as possible in my opinion,” said state Rep. Randall Shedd, R-Cullman.
Alabama’s seven House members and both senators all supported the bill — the “Agriculture Improvement Act” – when it passed Tuesday.
The bill provides no direct dollars to struggling rural hospitals, but various of its provisions aim to ease their dire prospects.
Five small-town hospitals have closed in Alabama since 2010, and several others have had close calls.
Danne Howard, executive vice president and chief policy officer with the Alabama Hospital Association, describes numerous rural hospitals are being on “the razor-thin margin.”
Howard said, “If all things stay the same, and there is no relief, we estimate 12 to 18 hospital closures could happen over the next two years. And if they don’t close, they would have to dramatically cut services and lay people off.”
Hospital executives and some lawmakers have called on Legislature to approve an expansion of Medicaid through the 2010 Affordable Care Act, better known as “Obamacare.” They say that the expansion is the only sure-bet resolution for providing financial relief to cash-strapped hospitals.
For now, though, advocates for rural hospitals are embracing a few early Christmas presents added within the farm bill.
Among them is the addition of a rural health liaison, which is a new position added to the U.S. Department of Agriculture who will serve as an advocate on behalf of health care and “relevant infrastructure needs in rural areas.”
The liaison was included in the first piece of original legislation sponsored by U.S. Sen. Doug Jones, D-Birmingham, who said the position will serve as a coordinator and communicator of federal resources to expand health care access throughout rural America.
“It streamlines and makes government more efficient,” Jones said during a media conference Thursday. “This will pull so many resources into one area and hopefully make things a lot easier. It won’t relieve the financial pressures, but it will serve as a central location for people to get access and things like that.”
In addition, the farm bill does the following for rural health care and hospitals:
- Assists in refinancing debt obligations of rural hospitals.
- Increases the authorization from $25 million to $350 million annually for the Department of Agriculture to extend loans and loan guarantees for broadband services in rural communities.
- Sets aside no less than 20 percent of funding for distance learning and telemedicine grants to combat substance abuse.
- Increases spending for telemedicine efforts, which would assist rural health care providers in offering real-time assistance with patients with a variety of services through video conferencing.
- Authorizes $10 million each year for the next five years to support agricultural workers and their families in rural areas by providing easily obtainable mental health services.
“There are wonderful rural health provisions included in this bill including the addition of an entire section for rural health care and an understanding from both the House and Senate agricultural committees what an importance (rural health care is),” said Diane Calmus, government affairs and policy manager with the National Rural Health Association.
Howard said Alabama will particularly benefit with the push to expand broadband to rural areas.
“In some rural communities, they don’t have cell phone access,” she said, mentioning that at one rural hospital in Alabama, physicians have to walk out to the parking lot to make cell calls.
“If you don’t have the broadband capabilities to connect a hospital … it’s sad,” Howard said. “I travel around the state and there are times when I find that it’s unbelievable that in this day and age, you can’t get a signal in some of these areas.”
While the farm bill is receiving praise, there’s wide acknowledgement that rural hospitals will have to find infusions of new revenue.
Medicaid expansion will likely be the most debated potential resource, and Democratic lawmakers are urging the supermajority GOP Legislature to consider it when the 2019 session opens in March.
At present, according to Howard, Alabama hospitals shoulder $530 million annually in uncompensated care for low-income patients. Medicaid expansion, she said, would bring immediate relief there.
On the same day that the farm bill passed Congress, the state’s House Rural Caucus met in its annual organizational meeting and to discuss topics of concern. Rural hospitals rose to the forefront.
“It continues to be a big priority,” said state Rep. David Standridge, R-Hayden, and who was elected Tuesday to serve another four-year term as the Rural Caucus chairman.
Standridge said that caucus members did not discuss Tuesday the prospects of expanding Medicaid.
Past efforts to expand Medicaid – pitting anti-tax conservatives against hospital executives — have gone nowhere in Montgomery. In 2016, lawmakers dipped into the state’s BP oil spill settlement to patch and already-existing $85 million Medicaid funding gap.
“We know that it’s something of what hospitals are asking for the state government to look at, but I really don’t have more information to that,” Standridge said. “The issue comes down to the state and whether it’s able to afford whatever is put into place. It comes down to that.”
State officials are also awaiting a report from a three-member committee, formed by Gov. Kay Ivey last year, which is looking into making recommendations on salvaging rural hospitals.
It’s unclear when that report will be concluded. The governor’s office did not respond to requests for comment on Wednesday.
“I’m glad the governor is looking deep into this subject and has a panel together that has to report back on this subject,” said Standridge. “Everyone is taking this seriously.”
Nationally, 93 rural hospitals have closed since 2010, Calmus said. And 44 percent are operating at a loss, which is up from 40 percent a year ago.
In the Southern States, such as Alabama, the problem is worse, she said.
The NRHA believes the rural hospital closure crisis hits worse in states that did not participate in Medicaid expansion under Obamacare. Alabama is one of 14 that have opted not to go along with the expansion.
“Rural hospitals see a lot of Medicaid patients,” said Calmus. “There are a lot of issues that are state policy-related, for sure.”
The Ivey administration has proposed new work requirements for some able-bodied Medicaid recipients, a move that would require federal approval, and would affect only a small fraction of Medicaid-eligible patients.
Ivey has not indicated interest in backing a Medicaid expansion.
Howard said the Hospital Association is gearing up for a public relations push starting after the first of the new year. The association is also planning to roll out an Alabama-specific economic analysis for expanding Medicaid.
“The top two things businesses locating to Alabama are looking at are education and access to health care,” said Howard. “No business is going to locate to an area without health care for their workers.”
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