Ted Cody is a retired physician and hospitalist, who formerly worked at Springfield Hospital.
[I] attended the April 3 Green Mountain Care Board meeting on rural hospital viability and read with interest Mike Faher’s report “Hospitals Tackle Changes Amid Financial Bleeding.” As a recently retired primary care physician and hospitalist employee of the failing Springfield Hospital, I may be able to offer some additional perspective regarding the sustainability of rural hospitals.
First, Springfield Hospital’s situation is dire. It owes nearly $14 million and has by no means been “saved” by the state as the article suggests.
Second, Springfield Hospital has employed physicians, PAs, and nurse practitioners unable to survive financially on their own; closed its ICU; and attained federal FQHC plus critical access hospital designation — in short, for many years used every sustainability enhancement promoted by the experts on the panel. Yet the hospital is nonetheless in real danger of closure.
Nor can this dire situation be attributed simply to mismanagement. Review of the GMCB’s analyses from 2017* shows Springfield’s percent of bad debt and of free care to be the highest in the state. And its efficiency is exemplary, with a compensation ratio lowest in the state. In the U.S., each hospital must pay its own way. If, despite innovations and efficiency, a town’s health burdens and lack of insured patients cannot support a full-service hospital, that hospital must shrink, even to clinic size if necessary, community needs be damned.
The experts on the panel predicted that a nationwide insurer/hospital/provider corporation like Kaiser Permanente — in short, corporate single payer — might ultimately provide the solution to this country’s exorbitant costs and lousy results. With insurance company overhead percentages greater than 10-fold that of Medicare, however, my own suspicion is that corporations, profit, and competition have proven their uselessness in health care — particularly in poor and rural areas.
Working toward the Kaiser ideal, the state’s hospitals have courageously signed on to OneCare, UVM’s Accountable Care Organization, a sort of HMO organized to reward “well care, not sick care.” Ninety percent of all Medicare and Medicaid billings will pass through it by 2022. Since 2017 it has doled out funds to each of its member hospitals based on that hospital’s historical average income; if a hospital can reduce expenses (care), it gets to keep a portion. Springfield has from the outset been a member of that organization, too. OneCare must now step up to the plate and earn the 10% of hospital billings it takes for administrative expenses. Specifically, it must help to equalize the burden of uncompensated care across the state. Until federal single payer arrives, with its defined annual hospital budgets and its costs spread over the entire US population, many more rural hospitals will fail.
