Rural Kansas Loves Its Hospitals, But Keeping Them Open Only Gets Harder
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ANTHONY, Kansas — Few things signal a rural community’s decline more powerfully than the closure of its hospital.
Like shuttered schools and empty Main Streets, an abandoned hospital serves as a tangible reminder of the erosive power of decades of population loss and unrelenting economic trends.
“Our rural communities are challenged and, because of that, our small hospitals are challenged as well,” said Tom Bell, the head of the Kansas Hospital Association. “It’s sort of a chicken-and-egg thing.”
In just the last 15 years, 160 of the nation’s rural hospitals have closed, including six in Kansas.
Many more are in danger of shutting their doors.
More than 80% of the state’s rural hospitals run at a loss, said Brock Slabach, a senior vice president of the National Rural Health Association.
“The operational difficulties (for rural hospitals) in our state are particularly problematic,” he said in a presentation to Kansas lawmakers earlier this year.
Shrinking populations mean fewer patients. Those who remain are typically older, poorer and sicker, making them more expensive to treat. Many people in rural areas also lack health insurance.
In some southwest Kansas counties, the uninsured rate approaches 19%, more than twice the statewide rate of 8.5%, according to the Kaiser Family Foundation.
Mismanagement along with state and federal policies also figure in the mix. Congress ordered cuts in Medicare payments in 2011 to trim the federal deficit and Kansas lawmakers have rejected the expansion of Medicaid the last several years.
People who run small hospitals argue expansion would provide coverage to thousands of low-income rural Kansans who now can’t afford to pay their medical bills.
Facilities known as Medicare Critical Access Hospitals are particularly vulnerable. Limited to 25 patient beds, they were designed in the 1990s to survive in remote areas. Kansas has more of them — 82 — than only Texas and Iowa.
Until recently, two of the state’s endangered small hospitals sat in the neighboring towns of Anthony and Harper in south-central Kansas.
Federal rules restrict the location of those specially designated hospitals, requiring them to be at least 35 miles apart. But the hospital districts in Anthony and Harper got waivers allowing them to establish competing facilities just 10 miles apart.
In 2014, with both hospitals in serious financial trouble, consultants proposed a merger. A long-simmering rivalry triggered by a fight over the county seat in the 1870s made that a tough sell, said Martha Hadsall. She headed the Anthony hospital board.
“I would describe one of our first joint board meetings as a junior high dance,” Hadsall said. “We sat on opposite sides of the room and stared at each other.”
Then came a windfall. With strings attached.
The late Neal Patterson was a native of Harper County. He went on to make millions after founding Kansas City-based digital medical recordkeeper Cerner Corp. He promised to pay much of the cost of a new, state-of-the-art hospital — if the two towns agreed to share a single facility.
Hadsall, a resident of Anthony and a longtime elementary school teacher in Harper, used Patterson’s offer and trust she had built in both communities to keep the boards talking. It took about a year, but the rival sides agreed that a merger was the only way to keep any hospital going.
Still, the idea remained a tough sell with residents of both communities.
In a 2015 interview with the Kansas News Service, Harper resident Bonnie June Day said the people pushing for a merger should just “leave Harper alone.”
“Our hospital is doing fine without being consolidated with them (Anthony),” she said.
To move public opinion, Hadsall said, the boards called residents of both communities to a meeting at the high school they had shared since consolidation in 1971.
They shared the hospitals’ balance sheets and provided an estimate of how much property taxes would need to go up to fill the gap between revenue and expenses.
By the end of the meeting, Hadsall said, most of those in attendance were nodding “‘yes’ to what the boards had chosen to do.”
Shortly after that, Harper voters dissolved their hospital district.
On a scorching day this past July, the communities came together to celebrate the opening of the Patterson Health Center, a $41 million facility built between Anthony and Harper next to Chaparral High School.
Lindsey Patterson Smith, Neal Patterson’s daughter and the head of the Patterson Family Foundation, acknowledged that most communities with struggling hospitals don’t have a millionaire to rescue them. Still, she said, “we’ve learned a lot” that could benefit other towns looking for ways to collaborate.
“We want to take some lessons from it and go out and see what is going to work in another community,” she said.
Bell, the head of the state hospital association, said he thinks the ongoing threat to rural hospitals has made rural Kansans open to new ideas. That included, he said, the possibility of rethinking, maybe even shrinking, those critical access hospitals that Kansas has so many of.
“What that hospital looks like in the future may not be exactly what it looks like today,” Bell said.
The hospital association wants federal regulators to let Kansas experiment in rural areas, perhaps with something between a clinic and a hospital. Those facilities might offer emergency and out-patient care, but not the kind of around-the-clock care needed by critically ill patients.
Small hospitals, many of which average fewer than two patients a day, can no longer afford to maintain wings of rarely used in-patient beds, Bell said.
Rural hospitals rely heavily on Medicare. Often, more than half of their patients are 65 or older. Without special waivers from Washington, Medicare money wouldn't be available to subsidize that niche between a doctor's clinic and an multi-bed hospital.
Kansas hospital administrators are also among the biggest advocates for Medicaid expansion. It could draw in nearly $1 billion a year in additonal federal tax dollars to the state. Most of that would flow to the state’s urban and suburban hospitals. Still, some rural hospitals could benefit even more because the dollars they received would constitute a bigger share of their budgets.
“It would play a very important role in stabilizing the finances of those rural hospitals,” said April Holman, director of the Alliance for a Healthy Kansas, a pro-expansion lobbying group funded by several Kansas-based health foundations, including those that help support the Kansas News Service.
Research, Holman said, shows that hospitals in the 36 states and the District of Columbia that have expanded Medicaid eligibility are six times less likely to close than hospitals in non-expansion states.
Kansas is one of 14 states that has opted not to expand Medicaid coverage to include more low-income adults.
Two legislative committees and a task force appointed by Democratic Gov. Laura Kelly are working on expansion plans ahead of the 2020 session that begins in January.
At least one of those approaches is being crafted to appeal to conservative Republicans who — fearing they no longer have the votes to stop expansion — want a less costly plan to consider.
Among other things, it would restrict Medicaid enrollment to Kansans who make too little to qualify for the federal subsidies that all-but-cover the cost of private coverage in the Affordable Care Act marketplace. But it would create state subsidies to cover those in the gap.
The effort to save struggling rural hospitals is as much about the economies of small towns as it the health of people who live in them.
Research offers a mixed picture on the impact of hospital closures on health. Some studies say when people are forced to travel longer distances, they often fail to get care that prevents nagging health problems from becoming more serious. Lack of ready access to emergency and obstetric services can also put people at risk.
But broadly speaking, studies haven’t found that the closure of a hospital leads to a measurable decline in people’s health.
However, the economic impact can be profound. Rural economists at Kansas State University recently calculated that every dollar of hospital income generates 59 cents for other businesses in a community..
So, when a hospital shuts down, towns get poorer. Per-capita income goes down and unemployment rates go up.
This is the fourth in a series of stories investigating the decline in rural Kansas and efforts to reverse it.
Support for this season of “My Fellow Kansans” was provided by the United Methodist Health Ministry Fund, working to improve the health and wholeness of Kansans since 1986 through funding innovative ideas and sparking conversations in the health community. Learn more at healthfund.org.
Jim McLean is the senior correspondent for the Kansas News Service, a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio covering health, education and politics. You can reach him on Twitter @jmcleanks or email jim (at) kcur (dot) org.
Kansas News Service stories and photos may be republished by news media at no cost with proper attribution and a link to ksnewsservice.org.