Possible ‘silver lining’ for rural hospitals seen in attention generated by COVID-19

• The COVID-19 pandemic creates an opportunity to focus attention on the fragility of rural hospitals.
• A Washington hospital on the brink of closure found support from its community through a special election.
• With a 70% approval rate, the community agreed to a onetime property-tax levy to support the hospital.

Like many critical access hospitals, Three Rivers Hospital in Brewster, Wash., had no financial reserves to keep it afloat when revenue dried up because of the COVID-19 pandemic. Seeing a two-week window before the hospital would be unable to make its payroll, CEO  J. Scott Graham in March called the state hospital association to discuss closing.

Within the hour, state and federal officials called Graham to find out how they could help the hospital survive, Graham said in an April 22 webinar hosted by the Alliance for Health Policy. It was the kind of support Three Rivers has needed for at least a decade, he added.

“I wonder if there’s a silver lining here,” he said. “Folks are recognizing that every one of these hospitals plays a vital role in a community’s health.”

Three Rivers received about $307,000 through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and has been approved for a Paycheck Protection Program loan, said Jennifer Best, the hospital’s business development coordinator. “That’s some good news for the hospital and our staff and providers,” she said. The hospital is trying to gauge whether it is eligible for additional assistance.

Beyond that, in a special election on April 26, residents in the hospital district voted for a onetime, one-year property tax levy, with 70% of voters approving the measure. The money, which will be collected in 2021, amounts to $750,000 to help cover operational expenses for the hospital, primarily the emergency department.

The fate of many rural hospitals is at stake

Although 60 million people — roughly one in five Americans — live in a rural area, many of the hospitals that serve them have been in dire financial straits for years. More than 350 rural hospitals were at high risk of closing in 2019, based on a Guidehouse analysis of operating margins, days cash on hand, debt-to-capitalization ratios and inpatient census. The COVID-19 crisis has exacerbated their plight.

“We have to use this pandemic,” Michael R. Brumage, MD, medical director of Cabin Creek Health Systems, said in the webinar. His organization operates 12 community-based and school-based health centers in West Virginia.

“It magnifies the defects within our healthcare system,” Brumage added. “We see the enormous financial and human consequences of failing to have a better public health system.”

Going public about financial problems is difficult for hospital leaders, but essential. “I was quite nervous about doing news interviews and talking about what we were going through,” Graham said. “What I found as a lesson from this is that by being honest, forthright and frank about these kinds of things, that actually was where we started to get the assistance that we needed, the attention that we needed and actually the support that we needed.”