Coronavirus Straining Financial Resources For Ohio Valley Hospitals

As coronavirus cases continue to increase throughout the Ohio Valley, rural hospitals are preparing for a potential surge of COVID-19 patients. But as they do so, these hospitals face tough financial decisions, and some could close down altogether.

Hospitals throughout the region have had to make brutal financial decisions the past two weeks. St. Claire Hospital in Morehead, Kentucky, furloughed 300 employees as the regional hospital saw a decline in patients. Appalachian Regional Healthcare, which serves east Kentucky and southern West Virginia, is furloughing 500 out of 6,000 employees. Williamson Memorial Hospital in West Virginia had planned to close this month before being bought in bankruptcy proceedings.

One hospital CEO in West Virginia says these financial troubles are linked to the efforts to fortify hospitals against the coronavirus pandemic, as states have suspended elective surgeries to make way for an anticipated surge of COVID-19 patients.

“When you take away the higher margin procedures like outpatient elective surgeries, you know, it really cripples a smaller community hospital,” said David Hess, who has served for six years as CEO of WVU Medicine Reynolds Memorial Hospital in Glen Dale, a town of roughly 1500 people in West Virginia’s Northern Panhandle. “The higher margin procedures pay for the negative margin or the lower margin procedures like staffing in emergency room 24-7,” he explained. “Some of the patients that come here, they spend an inordinate amount of time here, and we don’t get paid to be able to keep patients for prolonged periods of time.”

Governors across the Ohio Valley have ordered hospitals to suspend elective procedures. For Reynolds Memorial, Hess said, that has meant about 20% fewer patients now than a month ago in his 90-bed facility because they’ve suspended joint replacements, gallbladder surgeries, and colonoscopies.

Yet he’s waiting for a looming financial crunch. He said most rural hospitals collect payment from lucrative elective procedures one to two months after it’s completed. That money pays for employee payroll and supplies. When that money doesn’t show as the coronavirus outbreak peaks in May, more tough financial decisions could await hospitals.

He said that’s why some hospitals are trying to get ahead of the crunch through furloughs.

“It may be the final straw for some of these distressed hospitals,” Hess said. “I don’t want to see anybody get laid off, and I don’t want to have to take away anybody’s hours because I know that’s how they live. And I know that’s what they depend on. So that does worry me at night.”

While he believes the WVU Medicine healthcare system is financially stable — the largest in the state representing 14 hospitals in West Virginia — his hospital is still considering taking out loans to survive the shortfall.

Closing Doors

Meanwhile, shuttered hospitals throughout the Ohio Valley are leaving a healthcare system hollowed out in preparing for the coronavirus.

An Ohio Valley Resource data analysis showed at least 21 hospitals have closed over the past 15 years in the Ohio Valley. Three of those closures came just within the past year in an area around Wheeling, West Virginia, about eight miles north of Reynolds Memorial. And more hospitals elsewhere are still closing this month, as governors commit to keep them operating during the coronavirus pandemic if necessary.

One of those is Our Lady of Bellefonte Hospital, a 220-bed facility in Greenup County, Kentucky, planning on closing by May due to a lack of available staffing.

“Listen. We’re going to use that building,” said Kentucky Gov. Andy Beshear at a press conference this week. “We’re going to use it. Whether or not the hospital system is operating at that time, we’ll operate it with somebody else. We are going to use that building and I’d like that hospital system to try to hold on.”

Yet the options that remain once these hospitals close are unclear. Penn State University Assistant Professor Simon Haeder has studied health care policy and hospital closures for years. He said while a state could take over a hospital through eminent domain, keeping it operational is another question.

“What do you do then to staff those hospitals…and to establish the supply chains to keep them running? Because most of these places, they have very limited supply from everything that’s needed for this crisis,” Haeder said. “The government, on top of not having the supply chains, also doesn’t really have expertise anymore in running these kinds of entities.”

Haeder said to maximize hospital capacity, relief funds need to be sent to struggling rural hospitals to keep them afloat while also relying on publicly-funded healthcare infrastructure already in place, such as using the numerous Veterans Affairs clinics.

Yet he said with many state budgets strapped for cash due to the pandemic, funding for these hospitals may be hard to find.

For one Kentucky elected official in Greenup County, he can see what his community is losing right outside his window.

“That’s the only hospital I got in my county. When it closes we will never be reopened,” said Kentucky State Rep. Republican Danny Bentley, who lives a mile away from Our Lady of Bellefonte hospital. “My heart’s in it.”

Bentley, a pharmacist and former president of the Ohio Pharmacist Association, also served on a volunteer board for the hospital. While he said it’s too late to save his local hospital, he hopes a bill he’s sponsoring in the Kentucky legislature will help other hospitals.

The legislation would create a state emergency loan program for rural hospitals in counties with 50,000 residents or less to fund staffing, upgrade facilities and provide services not previously available. The bill unaminously passed the House, and he hopes it could get a vote soon in the Senate.

Bentley said after seeing a bill advance providing a $35 million state-funded loan for the purchase of Jewish Hospital in Louisville, he wants more attention for rural healthcare providers.

“It’s a truly needed instrument, so they’ll have that chance,” he said. “I hope that I can do something for this county in this area.”