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KHN has a very good deep dive today into a small Kansas town losing its local hospital. The residents, of course, are not pleased but the whole thing raises some tough questions.
Dealing With Hospital Closure, Pioneer Kansas Town Asks: What Comes Next?
Seems clear from the article the hospital was a pillar of the community (built in part with $1 million raised by the residents themselves) but the economic reality is that it doesn't fill its beds. A filled bed is a revenue stream--and to the extent it's not, as with an uninsured person, that's why Medicaid expansion helps hospitals by turning the beds the newly insured fill into revenue streams--which goes toward covering the fixed costs associated with keeping a hospital open.
The world we've been moving toward under the ACA is one in which keeping people healthy--and out of a hospital bed--becomes a revenue opportunity for health care providers. That's something of a paradigm shift in the way the health care delivery is organized, the way we think about what the health care is and ought to be, and the business models underpinning the industry. But the evolution is unavoidably gradual which means providers are in some sense stuck with a foot in both worlds right now.
The article notes that, in response to the ACA's financial incentives, over a 5-year period this hospital slowed the revolving door of patients getting discharged and bouncing back with another admission the same month from 18% of their patients down to 5.5% (!) through active outreach to get patients in for an office visit within two weeks of the discharge. Keeping them healthy, keeping them well, and addressing their needs in lower-cost settings instead of forgetting about them until they need a hospital admission is good for the patient and now somewhat financially beneficial. But keeping someone out of the hospital still chokes off a revenue source for that hospital.
Indeed, re-orienting the business models driving our health system toward rewarding those providers who keep people well saves money in the long run precisely because if people are healthy then our system doesn't need to maintain as many beds and can shed some of those expenses. That's not the primary dynamic at play here--per the article, this is not a particularly healthy community--but the "do we really need this infrastructure?" question should become more and more important in future years as we focus more on tackling health care costs and, one hopes, improving population health.
But this article hits on the two biggest concerns at present with hospital closures: the public health impact and the impact on the local economy/jobs (since a decent chunk of the costs associated with keeping such facilities open is the paychecks they're supplying).
Is it worth keeping a largely empty facility open and staffed just in case? Is health-care-as-a-jobs-program worth maintaining just to feed the local economy, particularly in areas where there may not be much else? These are questions rural areas in particular are facing right now but there are lots of communities that should be (and perhaps will be) grappling with these questions.
Dealing With Hospital Closure, Pioneer Kansas Town Asks: What Comes Next?
Yet, even as this town deals with the trauma of losing a beloved institution, deeper national questions underlie the struggle: Do small communities like this one need a traditional hospital at all? And, if not, what health care do they need?
And when patients here get sick, many simply go elsewhere. An average of nine patients stayed in Mercy Hospital Fort Scott’s more than 40 beds each day from July 2017 through June 2018. And these numbers are not uncommon: Forty-five Kansas hospitals report an average daily census of fewer than two patients.
Seems clear from the article the hospital was a pillar of the community (built in part with $1 million raised by the residents themselves) but the economic reality is that it doesn't fill its beds. A filled bed is a revenue stream--and to the extent it's not, as with an uninsured person, that's why Medicaid expansion helps hospitals by turning the beds the newly insured fill into revenue streams--which goes toward covering the fixed costs associated with keeping a hospital open.
The world we've been moving toward under the ACA is one in which keeping people healthy--and out of a hospital bed--becomes a revenue opportunity for health care providers. That's something of a paradigm shift in the way the health care delivery is organized, the way we think about what the health care is and ought to be, and the business models underpinning the industry. But the evolution is unavoidably gradual which means providers are in some sense stuck with a foot in both worlds right now.
The article notes that, in response to the ACA's financial incentives, over a 5-year period this hospital slowed the revolving door of patients getting discharged and bouncing back with another admission the same month from 18% of their patients down to 5.5% (!) through active outreach to get patients in for an office visit within two weeks of the discharge. Keeping them healthy, keeping them well, and addressing their needs in lower-cost settings instead of forgetting about them until they need a hospital admission is good for the patient and now somewhat financially beneficial. But keeping someone out of the hospital still chokes off a revenue source for that hospital.
Indeed, re-orienting the business models driving our health system toward rewarding those providers who keep people well saves money in the long run precisely because if people are healthy then our system doesn't need to maintain as many beds and can shed some of those expenses. That's not the primary dynamic at play here--per the article, this is not a particularly healthy community--but the "do we really need this infrastructure?" question should become more and more important in future years as we focus more on tackling health care costs and, one hopes, improving population health.
But this article hits on the two biggest concerns at present with hospital closures: the public health impact and the impact on the local economy/jobs (since a decent chunk of the costs associated with keeping such facilities open is the paychecks they're supplying).
What happens when a 70-year-old grandfather falls on ice and must choose between staying home and driving to the closest emergency department, 30 miles away? Where does the sheriff’s deputy who picks up an injured suspect take his charge for medical clearance before going to jail? And how does a young mother whose toddler fell against the coffee table and now has a gaping head wound cope?
There is also the economic question of how the hospital closure will affect the town’s demographic makeup since, as is often the case in rural America, Fort Scott’s hospital is a primary source of well-paying jobs and attracts professionals to the community.
Is it worth keeping a largely empty facility open and staffed just in case? Is health-care-as-a-jobs-program worth maintaining just to feed the local economy, particularly in areas where there may not be much else? These are questions rural areas in particular are facing right now but there are lots of communities that should be (and perhaps will be) grappling with these questions.
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