‘Slightly more breathing room’: Fewer rural hospitals at risk of closure, but threat still looms

by Devna Bose, Mississippi Today
February 8, 2023

A newly updated report shows that fewer Mississippi rural hospitals are at near-term or immediate risk of closure than they were three months ago.

But the leader of the Center for Healthcare Quality and Payment Reform, the organization behind the report, warns that Mississippi is by no means out of the danger zone.

The October version of the report, which the organization releases every three months, said that over half, or 38, of Mississippi’s 70 rural hospitals were at risk of closing. Of those, 24 were at risk of closing imminently .

New data from mid-January shows that now, 38% are at risk of closing. Of the 28 rural hospitals at risk of closing, 19 are at risk of shuttering immediately, putting the state fourth in the nation for percentage of rural hospitals at immediate risk of closure.

Currently, the center reports there are 74 rural hospitals in Mississippi. Miller said the number changed from 70 to 74because the federal classification of “rural” hospitals has changed since last year, and the organization’s report previously did not include hospitals for which they did not have data.

The updated report also features new data points, including the amount of rural hospitals losing money taking care of patients, which is about two-thirds.

The center assesses how imminent the threat of closure is by estimating how long hospitals can maintain operations while losing money on patient services. Hospitals are deemed at risk of closing when they can only sustain losses for six to seven years, and at immediate risk when their assets can offset those losses for only two to three years.

Harold Miller, the president and CEO of the national policy center, said the numbers show a slight change in a state with many hospitals at-risk.

“I wouldn’t take it as an improvement,” he said. “At most, I would say it might suggest that there is slightly more breathing room than you might have thought, but there still isn’t much.”

Mississippi State Health Officer Dr. Dan Edney agreed: “Yes, we’ve gone from alarming to just plain bad,” he wrote on Twitter.

Neither the Mississippi Hospital Association nor the Mississippi Rural Hospital Association responded to requests for comment by the time of publication.

Rural hospitals are essential to their communities. Their closures often mean a total loss of health care and more pressure on nearby hospitals in a state with some of the worst health outcomes in the country.

“The number could go up again,” Miller said. “I don’t think you can interpret that there’s some great trend of improvement going on. The important thing is not the exact number that’s at risk, but the fact that you have a lot of hospitals that are losing money and don’t have the assets to cover them.”

Miller said the numbers in the report, which is updated with new data quarterly, can vary dramatically from year to year. During the pandemic, hospitals received temporary federal grants to offset losses. Others might have taken out loans, he said. Some might have been forced to eliminate an essential service.

While that might stabilize the hospital’s financial status, it’s a loss for the community.

Greenwood Leflore Hospital, for example, recently shuttered its labor and delivery unit, primary care clinic and reduced other services. Delta Health-The Medical Center in Greenville also closed its neonatal intensive care unit and cardiac rehabilitation department last year.

And while it appears slightly fewer hospitals are at risk of closing, they’re still not profitable. The number going down doesn’t mean fewer hospitals are having problems — it means they might be able to stay open longer than the previous estimate suggested, Miller said.

“They might have net assets available, and that will keep them afloat for a while,” he said. “In other words, they can lose money because there’s money in the bank. But sooner or later, when the losses continue and the money in the bank runs out, they’re technically bankrupt.”

Studies have shown that Medicaid expansion would allow millions to flow to struggling hospitals and create thousands of jobs, but Miller said while it might provide some relief, it’s not the only solution. Miller, whose organization advocates for payment reform, said the medical payment system is flawed and hospitals are underpaid by commercial insurers.

Despite the lower number of hospitals at risk of closure in Mississippi, the report should still incite concern, he said. Its purpose is to draw attention to the problem before it gets worse.

“Once a hospital closes it is very difficult, if not impossible, to reopen it,” he said. “And you don’t suddenly wait until the hospital is going to close and say, ‘Let’s find a solution.’”

“Mississippi needs to be doing things now to try to help make sure that these hospitals don’t close.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.