Q&A: One Perspective On Why W.Va.’s Hospitals Are Collapsing And What’s To Be Done
This month Fairmont Regional Hospital announced it was closing its doors. It's the fourth Appalachian hospital to do so in the last six months. Health Reporter Kara Lofton spoke with West Virginia Hospital Association President Joe Letnaunchyn about why so many rural hospitals are struggling and what he sees as possible solutions.
Lofton:Fairmont Regional was the fourth hospital to announce a closure in this region in the past six months. There’re the two in the Wheeling area and one just across the border in Ashland, Kentucky. So, four hospitals in Appalachia in six months is a pretty stunning rate. Talk to me briefly about what's going on with rural hospitals in Appalachia?
Letnaunchyn: Well rural hospitals, and all the hospitals in West Virginia are facing financial challenges primarily due to the payer mix that we have of the patients. We have now 45 percent Medicare patients, about 23percent Medicaid patients, you throw PEIA in there, you have close to 70 to 75 percent, depending on a specific facility and where they're located. These are payers that all pay below cost [and] this has been going on for years.
And the difference between payment and costs, the gap has widened over the years. So it's not getting better. It's not going in the right direction. And when you have that many patients in your facilities that are being paid below cost, that's a real challenge financially, and that has a ripple effect on everything else that you do. You have to look at services that you offer, you have to look at the costs that you have of operating your facility. I think our facilities have cut costs so much they're running out of notches on their belts, in order to provide quality care, on a timely basis and provide the services that the patients need.
Lofton:Following the announcement that Fairmont regional be closing several lawmakers may comment expressing dismay and concern about the closure. Let's listen to a clip from delegate Linda Longstreth from Marin County.
Longstreth: We need an emergency hospital where we can save lives in our county and not have to go to another county and send them someplace else, because a company in California decides they're not making a profit. And that's what this was all about. They're not making a profit. So they're going to dump them.
Lofton:She's calling on the governor to take action saying that we can't allow a company in California to make these decisions. I mean, is that true? Does the state have any power to step in [and stop] many of these closures that are happening?
Letnaunchyn: I think we have the power and the ability to step in and continue the dialogue. I mean, the governor yesterday indicated that he was meeting with the delegation from the Marion County Fairmont area, was going to have discussions with them. I know Senator Manchin he reached out to us about the situation and I believe he contacted the folks or issued a statement about Fairmont. I mean, that's his, that's his hometown. He's a native of Fairmont. So I think these discussions will occur. What comes out of them? I don't know.
Alecto bought this facility out of bankruptcy about three, four years ago. And I think they paid somewhere in the range of $15 million for the facility. And then they're saying over the past three years, they've lost another $19 million. So if you do the math, you're talking somewhere around $35 million of cost and loss in the facility. And so the decision that they make, the owner of that company makes in California, is one that -- I think we can have discussions, but we don't have any power to force him to do anything just like it OVMC. He made the decision. It was very abrupt. The facility was closed quickly. It sounds like this is the path. At least right now.
Lofton: Hospitals are often operating at a very thin margin these days in rural America, partly due to the payer mix. What, I mean we're talking about solutions, like what are possible solutions to this. We are facing an aging population, we are facing a relatively low workforce participation. So the issues facing these hospitals are not going to go away. Is there an answer?
Letnaunchyn: I think part of the answer is new jobs, more jobs, training, some of the folks that we have right now for existing jobs. I'm being told that there are positions that are unfilled in the state because we don't have skilled workforce, or folks they can get past the drug tests. Yeah, that's always an ongoing discussion. We think what we're going what we need to do is we announced yesterday that we're going to create a hospital sustainability work group, financial sustainability work group, so that we can bring our hospital leaders together from small hospitals, large hospitals, large system, very rural. Hospitals and really talk to them and let them talk to us about what the issues are that we're trying to figure out what their concerns are, what their limitations are, what their financial situation is, and see if we can come up with any recommendations to give to the governor policymakers and the legislature.
Lofton: Is this a state issue? like is this an issue that the legislature needs to figure out? Or are we looking at a federal issue that I mean, this is not just a West Virginia problem? This is really a rural America problem. What role do federal policies play and all this?
Letnaunchyn: You know, I think we've always said West Virginia's issues, our West Virginia challenges and we have to find the solutions. I think we're the best ones to figure out what our problems are and how to solve them. I don't think I went to the federal government looking for help.
I mean, there's proposals out there to reduce even further while we get paid under Medicaid – there is a block grant proposal out there. That was just announced by the President last week that we don't support. There's litigation out there to eliminate the [Affordable] Care Act. We don't support that. We have 165,000 people at this point in time or somewhere around there...maybe 155 that are on the coverage as a result of Medicaid Expansion. That's the working group that have paychecks, but their income is low enough to qualify for coverage under Medicaid, and in some that qualify for those subsidies. If the Affordable Care Act is thrown out in court that'll have a devastating impact on us because the payments that we get for the expanded population is a 90 -10. federal match. If we pay 10 percent of the cost, the feds pay 90 percent. Our state budget couldn't handle that big of a hit. It would be billions of dollars.
Lofton: If West Virginia needs to call West Virginia solutions. You have ideas for that? What are some of the possible long term policy solutions for this?
Letnaunchyn: Well we're going to talk about that in our work group. But if you listen to the legislature, it's all about jobs, we need to bring jobs into the area. If we had jobs here, look at the “for lease” signs, excuse me, in Charleston. Um, there's a number of buildings that are for least there's a number of people that have left the area, we need to bring people back to West Virginia, we need to keep the younger population from leaving West Virginia, we need to be able to train more of our clinicians, we're looking at workforce issues, whether it relates to nursing and even physician shortages. There's discussions about ways to attract them here. And to keep them here in a state. That's all part of the solution on the workforce side, but then when you get them here, you have to make sure you have the right payer mix to be able to to make the payments for salaries and benefits for those employees. So hospitals in this state are a big deal. Sometimes the largest employer in their county or their community Maybe we need to stop looking at counties and communities and start looking at regional delivery of care.
Appalachia Health News is a project of West Virginia Public Broadcasting, with support from Marshall Health and Charleston Area Medical Center.