When rural hospitals close, towns struggle to stay open

Adam Ragusea Apr 10, 2014

When rural hospitals close, towns struggle to stay open

Adam Ragusea Apr 10, 2014

There’s a healthcare crisis in America that you might not have heard about: Rural hospitals are closing at a rate that’s starting to get some politicians’ attention. Republicans blame Obamacare, while Democrats blame some states’ refusal to expand Medicaid. In reality, the problem started years before all that.

What’s clear is that rural hospitals and the rural economy rise and fall together.

Hancock Memorial Hospital in the tiny town of Sparta, Georgia was among the first of nine rural hospitals that have closed across Georgia since 2000. Today, it’s overgrown with weeds and vines, while the roof caves on the gurneys and computers still inside.

“I mean, it was just not economically feasible to maintain the staff and the equipment,” says Robert Moore, whose family has lived in Hancock County since they were emancipated.

Sparta was once a fancy town with lots of antebellum mansions. But Moore says things really started going south in the 1990s.

“Rural Georgia was based on the textile industry, and when NAFTA was signed, all that moved to Mexico, and… sent everything into a downspin,” Moore says.

Hancock County Commission Chair Sistie Hudson says it’s not surprising that a population so small and so poor can’t support a whole hospital. “There’s about 2,600 people [in Hancock County] that still work, out of the little more than 8,000 that we have,” she says.

But with Hancock Memorial boarded up, the prospects for future growth are even worse. When Hudson tries to recruit a new industrial employer, one of the first things they ask is: “Do you have a hospital?”

“You just really need a local facility just in case somebody gets hurt in these factories, you know? It’s something that they like to see,” Hudson says.

Just imagine what having no emergency room nearby would do to a company’s workers comp and other insurance costs. It’s a non-starter for most businesses. 

University of North Carolina professor Mark Holmes studied the economic impact of 140 rural hospital closures nationwide.  He found that three years out, losing a hospital costs a community, on average, “about 1.6 percentage points in unemployment, about $700 in per capita income, and that was in [year] 2000 dollars so that’d be probably about $1,000 currently.”

And that’s only the effect on economic health. What about health?

Speaking on the subject a few weeks ago, Georgia state Senator David Lucas paused several times to weep as he addressed his colleagues this spring: “[It] ends up with rural communities, such as Hancock County, where 39 percent of the folks who have a stroke or have a heart attack die.” That’s a lot higher than in counties with hospitals close by.

Georgia officials are exploring solutions to this problem that could become a national model – basically, a medical facility that does more than an urgent care clinic, but isn’t as big a whole hospital. But Georgia’s Community Health Commissioner Clyde Reese says America’s healthcare system doesn’t provide enough ways for the operator of that kind of place to get paid.

“They’re not going to be hospitals, they won’t be reimbursed as hospitals, they won’t be able to charge a facility fee, they won’t get the Medicaid add-on rate, etc.,” Reese says.

Reese is working on ways to fix that. Because without reimbursements, there will be no emergency care. And with no emergency care, there probably will be no new jobs in Hancock County.

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