(4-29-30) Small rural hospitals are facing a crisis outside of COVID 19. Not being able to provide their normal services that they have provided in the past have been cut-down to the quick. Hillsdale Hospital asks Michigan Governor Whitmer for some relief…as soon as possible.
Dear Governor Whitmer:
Over the past twenty years, the American healthcare system has faced incredible turbulence: insurance payment model changes, stock market failures, a recession, and more. Technology innovations like telehealth now require local providers to compete nationally for patients. Apps that monitor patient health no longer require a doctor’s involvement. Not all of these changes are bad. The negative impact to rural health, however, is massive.
As manufacturing and industry move out of rural America, commercial health insurance dries up. Healthcare providers end up with a higher percentage of government-insured patients and higher levels of uncompensated care. Rural hospitals have battled this for decades, accepting it as our fate because we must be present for our community. At Hillsdale Hospital, 70 percent of all reimbursements are from Medicaid and Medicare. Commercial insurance represents 29 percent and pays us much less than they do larger healthcare systems with higher volumes and more negotiating power.
Since 2010, 128 rural hospitals in America have closed—a shocking number. And when rural hospitals close, people die. There is no way around it. Rural patients are forced to drive an hour or more to receive healthcare at larger health systems in larger towns, even when suffering heart attacks, strokes, birthing complications and other time-sensitive health emergencies. Without quick access to an emergency room, operating room or clinic, lives are lost.
When COVID-19 arrived at our doorsteps, this already grim conversation took on a much more concerning tone. Notwithstanding the global economy’s demise during this pandemic, the real-life implication for rural Michiganders who already struggle to access specialty and primary care is life or death.
If there is one thing that we need now more than ever, it’s patients using our services instead of living in fear of leaving their homes while their health needs are left unmet. Blanket restrictions in your executive orders have placed our small, rural hospital in the same standing as those in large, highly-populated areas like Detroit, busy with 75 percent of the state’s COVID-19 patients. The most devastating order required closure of every hospital operating room to elective procedures, even while 22 Michigan counties have less than ten confirmed COVID-19 cases.
Typically, hospitals receive 20 to 30 percent of their net revenue from the operating room, including emergency and elective surgeries. For us, general surgery accounts for 12 percent of our gross revenue and 20 percent of our net revenue. Within just the last month and a half, our losses from surgery coupled with the stock market decline and projected lower patient volumes in all areas over the next three months create a $10 million shortfall for our fiscal year ending June 30. The CARES Act and other stimulus packages that tout billions in funding for hospitals have so far done little to stop the bleeding. At this point, all we have available to us are loans, frontloaded payments for future services, and the hope that they will be forgiven. Our first (and possibly last) share from the government of our lost reimbursement was just more than $1 million—10 percent of our lost revenue projections.
Even large hospital systems cannot sustain normal operations in such circumstances. Rural Michigan and its healthcare providers, however, will be changed forever unless we take immediate, decisive action. Getting Michigan moving starts one community at a time, one hospital at a time. This starts with each community assessing for themselves the level at which they can ramp-up their healthcare services, specifically elective surgeries. We need to allow local hospital leadership, local public health officials and local physician leaders to determine what is and is not safe for our patients.
Executive orders based on science are important and we unequivocally support them. But those that go beyond are reckless and senseless, crippling already fragile rural economies for the sake of managing highly-populated areas. We look toward the leadership of our government in Lansing to ensure that we have access to PPE supplies while considering the welfare of the general public and their health beyond the risks of COVID-19. We have zero patient-to-patient, patient-to-employee or employee-to-employee transmission of this virus. We cannot penalize hospitals like ours because of efforts to control outbreaks and PPE supply in larger communities with significantly higher infection rates. This is not a one-size-fits-all dilemma.
We are following—to the letter—all of the recommendations from the CDC, federal, state and local health officials to ensure that our patients are well cared for and that our facility is safe. We have done this throughout the pandemic, as evidenced by our in-hospital transmission rate of zero. Without opening up hospitals to appropriately perform elective surgeries within the next week and better government support to help make up for lost revenue, hospitals like ours (and, I would submit, others throughout Michigan) will be forced to close their doors—forever.
How ironic that during a global pandemic, hospitals are laying off nursing staff throughout Michigan because we can’t sign their paychecks, yet we are expected to treat the sickest of patients in our communities without interruption. The airlines received a $58 billion bailout from Congress, but we cannot get the financial resources to support our basic healthcare operations, making complete closure a very real possibility for hospitals like ours. Counter-intuitive? Yes. We petition you to get Michigan hospitals working again in communities where the numbers of COVID-19 are low and where we have zero in-hospital transmission of this virus. The lives of our community members depend on it.
Jeremiah J. Hodshire, Vice President & Chief Operating Officer
Hillsdale Hospital, Hillsdale, Michigan