More than 100 rural hospitals in the U.S. have closed in the past ten years, and another 30 percent of rural hospitals are in danger of closing. The Center for Healthcare Quality and Payment Reform warns millions of people could be directly harmed if these hospitals close.
One option being offered to rural hospitals is changing to Rural Emergency Hospital (REH) status. The Eureka Springs Hospital Commission recently voted to seek REH status. Commission Chair B. Kent Turner gave a presentation about this proposed change to Eureka Springs City Council Oct. 23.
Those who apply to the State Department of Finance and Administration can seek up to $5 million in grants, in addition to an extra three percent added to Medicare reimbursements, ESH spokeswoman Samantha Jones said. However, hospitals can no longer provide inpatient services. Patients can stay no longer than 24 hours.
“If the designation change is approved, we will also receive approximately $270,000 per month from the Center for Medicaid and Medicare Services for our hospital operations,” Jones said. “This is a consistent payment to our hospital.”
Jones said the proposed change from the current status of a Critical Access Hospital (CAH) to a REH designation is not guaranteed but could have many benefits.
“As a REH, we would have the opportunity to expand our outpatient services so that Carroll County residents don’t have to drive two hours round-trip for much-needed healthcare,” Jones said. “We believe this designation change is an investment in our hospital and community on the whole, and we are thankful to the State of Arkansas for making it a possibility for us.”
Local resident Gwen Bennett has concerns about the proposal. She and three members of her family received excellent inpatient care at the ESH and she would hate to see people have to travel long distances to Springfield, Mo., or the Northwest Arkansas corridor to be hospitalized or visit.
“If my parents and my partner John Mitchell had not been allowed to stay inpatient at our local hospital, it would have necessary and we would have been billed for an ambulance ride to transport them Fayetteville or Springfield,” Bennett said. “My parents were elderly. You can’t leave a person alone in the hospital. You have to be right there because things can go wrong. If they had been farther away, this would have meant commuting every day 40 miles one way or getting a hotel room. I understand the money is a great incentive, but I would much rather have my loved one in the hospital in town.”
Bennett is concerned about the long-term impacts.
“Money is being dangled,” Bennett said. “But I would rather drive over for a test than have to use an ambulance to travel to a bigger hospital. And why bother renovating the hospital if you are just running an emergency room and tests?”
Bennett said in addition to exceptional care, she found the hospital easy to work with when it came to arranging monthly payments. “They were easy and non-dunning on the payment,” she said.
Sue Hopkins, who worked at ESH as a social worker, said for many years the hospital’s public relations pitch was, “Keep your people here in the community so you don’t have to drive over to the corridor.
“Now the hospital is saying that inpatient and rehab close to home don’t really matter anymore. They are going to promote ‘close to home’ for their outpatient services instead. And I also realized that if the hospital swing bed program (aka rehab program) ends, then our community will only have Blossoms, the local nursing home, for rehab close to home. I hope this community keeps watch over the quality of care there. In past years, the nursing home had a volunteer group that helped bolster the needs of the facility.”
Hopkins said the Eureka Hospital and many rural hospitals have been hanging on by a thread for the past 30 years. Many have closed. “These Medicare Advantage programs put the nail in the coffin,” she said. “They are not considered Medicare, so hospitals don’t get reimbursement like they used to. Going to a REH may be what they have to do; financially that may be all they can pull off. But it is sad for the community if that’s the case.”
Turner said the REH status is being pushed because CAHs (the current designation of ESH) are going out of business one after the other.
“It is because there isn’t enough inpatient volume,” Turner said. “Our hospital is losing close to $200,000 to $240,000 a month. We are going through our reserves very fast. We are applying for REH status in an effort to save the hospital. We have been getting immense pressure from the state and feds to do this.”
Turner said he fully understands that the community is worried about losing inpatient and swing bed capacity for rehabilitation. But he said EHS rarely keeps people inpatient very long anyhow. Critical patients have to be transferred to a larger hospital.
ESH has been planning a major renovation project, but Turner said funding hasn’t yet been found for that yet and no money has been wasted. The REH can have up to six beds. ESH currently has 15. Turner said the architects for the expansion have indicated plans can be downsized to fit the REH status.
The hospital board hopes that the change would allow more specialty clinics in areas such as urology, cardiology and wellness care for expectant mothers. Turner said many women in Carroll County go their entire pregnancy without seeing a doctor.
The amount of the grant could depend on who gets in line first. Turner said that is why the hospital commission held a special workshop Oct. 3 to address the issue. He said the grant could be for up to $2.5 million for the initial application and another $2.5 million once the conversion is completed.
Some health authorities have said the choice for many rural hospitals is between REH status or no hospital at all.
“We have 1.4 million tourists in Eureka Springs every year,” Turner said. “We must have some kind of hospital facility for tourists and our residents. If you have something like a stroke, you don’t have time to drive an extra 15 miles to Mercy Berryville. You need to get diagnosed and receive a clot-busting injection within a two-hour period. If you don’t, it is very bad. We have an 80-slice CT machine that allows us to diagnose stroke quickly. We are very proud of our stroke program.”
Hospitals are a major economic driver in a community, and quality healthcare is an important factor for both businesses and individuals, said Ryan Kelly, administrator, Arkansas Rural Hospital Association. He said REH’s have a very favorable reimbursement rate, and the model may be ideal for select communities that need emergency room access but not necessarily other hospital-provided services.
Kelly said in addition to forgoing all acute inpatient services, another disadvantage of hospitals is losing CAH cost-based reimbursement and 340B drug program savings.
“One sacrifice of REH is the loss of the 340B program, which financially is probably the biggest loss that the hospital will incur if converting to REH,” Kelly said. “That’s why a cost/benefit analysis must be run to ensure that the hospital actually benefits in the end. There are many advantages of the 340B program for both the patient and the hospital. Many hospitals are only staying afloat because of this program and the margin that it creates for hospitals and their pharmacies.”
During a presentation to city council on Monday, Turner said that the hospital would know by the start of 2024 if its designation has been changed.