Monday, 13 July 2020 10:44

Rural health care buckles under pressure of COVID shutdowns

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RALEIGH — The COVID-19 shutdowns have ravaged rural health care.

Gov. Roy Cooper’s administration froze elective surgeries to prepare for an onslaught of coronavirus patients and at the same time destroyed a major revenue source for hospitals.


The shutdown cut medical services and weakened rural hospitals. They lost millions while waiting for COVID-19 hospitalizations to spike in their communities. But that surge hasn’t materialized.

Cooper has signaled he will refreeze elective surgeries if hospitals become overwhelmed. If that happens, the damage to rural public health may be irreversible. 

Rural hospitals were fragile, even before the pandemic. The longer Cooper shutters the economy, the slimmer their chances of financial recovery. Some rural hospitals won’t exist after the pandemic subsides.

For three years, bad luck has dogged Lumberton’s hospital. It endured three hurricanes, a lightning strike, a steady rural exodus, statewide shutdowns, and a global pandemic.

“We believed this was our turnaround year, to get back to the positive side of those things,” said Joann Anderson, president of Southeastern Health in Robeson County. “And then COVID hit. What was supposed to be our turnaround was actually catastrophic.”

For Martin General Hospital in Williamston, the past few months have been devastating. In April, revenue plunged roughly 40%. They dropped 30% in May. Elective surgeries are the “bread-and-butter” of rural hospitals. Without them, hospitals founder, says John Jacobson, interim chief executive officer.

“That’s the lifeblood of a small, rural hospital,” Jacobson told Carolina Journal. “We run pretty thin margins out here in the rural community. It’s not a high-profit business. Being able to break even is our goal.”

Even as the state prepares for the next coronavirus surge, rural hospitals are cutting services or reducing staff. Patients in the most underserved areas will suffer.

Cooper’s shutdowns already shuttered services and clinics across Robeson County, where Southeastern Health serves one of the largest and poorest counties in North Carolina. Three in 10 residents live in poverty and rely on Medicaid for coverage. The county covers more than 900 square miles.

The hospital lost $17 million. It closed a handful of offices and a clinic on the outskirts of its service area. It had already slashed salaries, projects, benefits, and expenses. It closed 236 job positions, Anderson told CJ.

“In the beginning of COVID, it was as if we had a hurricane every month,” Anderson said. “If we went back to Phase One again, that’s another huge financial hit. I hate to use the word ‘catastrophic.’ … But you can’t weather that many storms in one year and be financially OK.”

Already, hospital closures are up from last year, said Mark Holmes, director of the University of North Carolina’s Cecil G. Sheps Center for Health Services Research.

“The nightmare scenario is that the damage of this wipes out health care provider infrastructure,” Holmes said. “Hospitals close, clinics dry up, people quit the profession … a dramatic decline in access, and it won’t be equitable.”

For Robeson County residents, losing the local hospital would mean driving 30 minutes or more to get care. Patients on Medicaid would lose their coverage when crossing into South Carolina. But Anderson says closing the hospital is still a distant possibility.

Hugh Chatham Memorial Hospital in Elkin fared better than others. Its surgical volumes cratered as much as 60% during the shutdown. Bad debt and charity care soared $1 million past their levels during the past year. But the hospital is stable and its reserves intact, Paul Hammes, CEO of Hugh Chatham Memorial Hospital, told CJ. 

Even without backsliding, Hammes expects a slow recovery. Patients remain wary, and hospital leaders fear the damage of shutdowns will be permanent. They worry mass unemployment could dismantle patients’ coverage and their ability to afford care.

Congress sent rural hospitals billions in federal relief. But that money is like an inflatable lifeboat, says Holmes. At some point, it will run out of air.

Even now, rural hospitals say federal relief falls short of the need. Bigger health systems sucked up much of the funding, leaving less for rural, independent hospitals, the Charlotte Observer reported.

North Carolina gave $30.9 million to 17 rural hospitals in hardship payments. The state accelerated supplemental payments to all hospitals. The state Department of Health and Human Services submitted a plan to allow Medicaid payments to offset Medicaid losses due to COVID-19. The department is waiting for federal approval, spokeswoman Kelly Connor said in an email.

“I don’t think it’s enough to cover anyone’s losses at this point,” Dr. Roxie Wells, president of Cape Fear Valley Hoke Hospital, told CJ. “We will respond because that’s what’s required of us.”