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Critical Access Hospitals Crisis in GA a National Bellwether

John Commins, for HealthLeaders Media, February 19, 2014

An advocate for rural health says the rural hospital community in Georgia, rife with closings, is so financially strapped that "about 10% of our population [can be considered] Third World Nation health status." More hospital closings are "inevitable" and the trend could spread to the rest of the country, he says.


Trotter

Jimmy Lewis, CEO of HomeTown Health, LLC

Lower Oconee Community Hospital, a 25-bed critical access hospital in Glenwood, GA in the southeastern corner of the state, announced this month that it will close because of financial pressures. The grim news for the nearly 7,900 people of Wheeler County marks the fourth closure of a rural hospital in Georgia in the past two years.

Attempts to contact the hospital proved fruitless. The plug has been pulled on hospital's website and nobody answered my telephone calls. CEO Karen O'Neal told WMAZ television that the 100 or so employees at the hospital had been laid off, and that "this restructuring is being done to provide sustainable medical services in the Glenwood area." She also told the television station that the hospital's owners are contemplating "some kind of urgent care center.''

Jimmy Lewis, CEO of HomeTown Health, LLC, an advocacy association for 56 small hospitals in Georgia, believes that closures of rural hospitals in his state could serve as a bellwether for the rest of the nation. Lewis spoke with HealthLeaders Media earlier this month, and the following is an edited transcript.

HLM: Georgia has seen four rural hospitals close in the past two years. What is driving this?

Lewis: Because of the incremental reduction in Medicaid over 10 years or so in Georgia and other issues, many of these critical access hospitals have about a seven-year death spiral that's a function of the cost-to-charge ratio. The rural hospital community in Georgia is financially strapped.

For the most part, they have financial losses due to operations, and if they are surviving, it's almost entirely on subsidies such as the disproportionate share payment and more especially payments from local and county governments. Reimbursements are down and they are continuing to fall. We are looking at losing disproportionate share payments. We are at a point where we have insufficient reimbursements.

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