The local economy also suffers when a hospital closes. Healthcare jobs can be some of the better-paying jobs in a community, and the loss of these jobs often forces affected workers to either move away or settle for lower-paying employment. Businesses want healthy employees, so fewer new businesses will move into a community without a hospital. Fewer jobs and fewer businesses lower the community tax base, which means there is less money to support the schools, sustain the fire department and maintain the roads and bridges.
Tennessee is not the worst state in the nation for rural hospital closures — we’re just the second worst. Within Tennessee, however, our Upper East region has been fortunate. In the past decade, no hospitals have closed here, and only one (Lee Regional Medical Center) has closed in nearby Southwest Virginia.
Ironically, our better-than-average hospital closure statistics may be the product of the circumstances that eventually created the recent hospital system merger. In the past, two health care systems (the former Mountain States Health Alliance and the former Wellmont) waged economic war against each other and did so, in part, through buying and building hospitals throughout the region. So while our rural hospitals have remained open, the new Ballad system currently has a huge debt from the battle. Now that Wellmont and MSHA have merged, Ballad Health’s most recent annual report shows around $1.7 billion in debt that has to be repaid. This debt is fortunately exceeded by around $3.3 billion in assets, including $1.2 billion in investments and over $200 million in “goodwill.”
On the other hand, four Ballad hospitals have been identified as being in perilous financial condition. Ballad CEO Alan Levine has said the merger is preventing hospital closures. This is true — for now — because when Tennessee and Virginia approved the merger, they made Ballad promise not to close any hospitals for five years. It should be noted the Federal Trade Commission opposed the merger and recently held hearings in Washington, D.C., on the topic. At present, even though Ballad must keep hospitals open, they can, however, still cut particular services at hospitals if deemed appropriate. For example, surgical services at Mountain View Regional Hospital in Norton, Virginia, were recently ended.
What happens when the five years are up? What can be done to protect rural hospitals after that? Solutions to the problem of rural hospital closures are often driven by community actions, so it is important that communities energetically protect their hospitals. Planning for these things takes time, so waiting to act until the five-year clock runs out isn’t a good idea.
Medicaid expansion does seem to provide some protection against hospital closure. Our neighboring state, Kentucky has had only four hospitals closed since 2010, compared to 10 in Tennessee. Kentucky is a Medicaid expansion state while Tennessee is not. Tennessee Gov. Bill Lee is not a supporter of Medicaid expansion but he has reported communications with federal officials on methods to improve access to quality healthcare.
Levine recently testified before the U.S. Senate Subcommittee on Primary Health and Retirement Security in support of a national floor on hospital Medicare reimbursement. At present, Medicare pays different rates to different hospitals, so rural hospitals are often paid less than urban hospitals. Mr. Levine also recently announced plans to reopen the hospital in Lee County, Virginia. He pointed out the Lee County facility, like hospitals in Unicoi County in Tennessee and Russell County in Virginia, will be a money loser that will be subsidized by profits at other hospitals in the Ballad system.
The future, of course, is uncertain as healthcare costs continue to rise. Healthcare leaders face difficult decisions as they balance patient and community needs against financial reality. Citizens in the region should understand that our rural hospitals are struggling. We must ensure that our elected officials and healthcare leaders know support of rural hospitals is a major priority for our region.
Dr. Marty Olsen is an obstetrics and gynecology physician in Johnson City. He has interests in international medicine and in confronting the opioid epidemic.
Editor’s note: A previous version of this column incorrectly stated the name of the specified hospital in Norton, Virginia. In a statement, Ballad Health said Norton Community Hospital continues offers surgical services. Ballad has not performed surgery at Mountain View since October due to low patient volumes.