Should We Close a Bunch of Rural Hospitals?
HHS: Yes:
The federal government’s program to help rural hospitals has grown bloated and unwieldy, according to a report released Thursday by the Office of Inspector General of the Department of Health and Human Services…
The OIG looked at all 1,329 hospitals [JCG: that’s about one of every four hospitals in the country] currently in the program and found that 849 of them would not meet the requirements if they were required to reenroll ― nearly 64 percent. And that’s costing the government an extra $860,000 per critical access hospital each year, according to the report. [JCG: Would you believe they are paid cost plus!]…
Medicare beneficiaries are also paying more. Coinsurance rates are an average of $400 more for outpatient care at critical access hospitals. That costs beneficiaries an average of $485,000 extra in coinsurance per hospital, the OIG found. That’s a total of about $1.3 million in excess payments a year per hospital for taxpayers and beneficiaries. So, all told hospitals in the program that are “exceptions” cost the federal government $1.1 billion.
Rural hospitals: No:
“We are alarmed by the message this is sending to rural America,” says Brock Sabbath, senior vice president of the National Rural Health Association.
Source: Kaiser Health News.
These are the perverse situations that arise from a government/private partnership.
Exactly. Government sets an unrealistic standard backed by public funds, then, when trimming inevitably comes, it leaves people high and dry.
“He adds that the report’s recommendations are politically impossible. “This is going to be dead on arrival in Congress. No one is going to support shutting down 70 percent of the rural hospitals in their state,” he says.”
This is how it always is. Government overpays and then we can’t get out of the deal because there isn’t enough political will. Is it really any mystery that we have outrageous debt?
I’m somewhat ambivalent about the fate of rural hospitals. I come from a rural area. If the local 9-bed county hospital were to close, the only people who would be terribly inconvenienced would be those in the nursing home that’s attached to the hospital. Everyone else would travel the extra 20 miles to a neighboring town where there’s a bigger hospital.
The county where my hometown is subsidizes the local clinic and hospital because it views medical facilities as essential to retaining seniors who otherwise might move to another town closer to medical facilities. Basically, it’s an economic development strategy.
The pertinent policy question: is economic development (or retention of residents with accumulated wealth) an initiative that HHS should spend its resources on? Or is this something that the local city/county would spend resources on?
I believe it’s the latter.
Exactly, localities can make their own accommodations that will satisfy this need.
“More than 60 million rural residents rely on critical access hospitals, he says, and they tend to have high rates of poverty, chronic disease and uninsurance. Without a local hospital, rural primary care doctors and clinics also tend to abandon an area, which could be “devastating to a community,” he says.”
In the short-run this will have negative effects, but given time to adjust, medical care providers will take advantage of these profit making opportunities and an appropriate level of service will be restored to rural areas.
Assuming that existing regulations don’t squelch the natural development.
Right. So, it isn’t that government should stay, it is that they shouldn’t have gotten involved in the first place.
One hand pays huge subsidies to forcibly develop these institutions in the name of equal access even though its likely that under a relaxed regulatory regime other ways would have been found to accommodate peoples’ needs.
The other hand then decides that the whole thing is too expensive and moves to shut them down.
The people affected are simply pawns, first in the drive to provide equal access to all by promoting government run health care, and then in the drive to show that government run health care can too reduce costs.
Markets, anyone?
Too true and we all suffer the consequences.
Just close some of them. Saving us money is a good thing.
Only if we are gaining more value than we are losing in health. We want the most efficient system that maximizes health and savings.