Most rural hospitals in Kentucky are struggling financially and looking for ways to survive

Most rural hospitals in Kentucky are loosing money, putting them at risk of closing if they don't find another way to do business, Miranda Combs reports for Lexington's WKYT-TV.

More than 65 percent of  Kentucky rural hospitals in 2012 had a negative operating budget, according to the latest report from the Kentucky Hospital Association, Combs reports.

"We've got a number of hospitals in Kentucky who have less than 15 days of cash reserves," state Auditor Adam Edelen told Kentucky Health News in September. "One hospital in particular told me that leaders meet weekly to figure out about who's getting paid and how much just to keep the doors open. . . . County officials are afraid they are going to lose their hospital, while the cabinet says all is well."

Officials with the state Cabinet for Health and Family Services acknoweledge problems at some hospitals, but told Combs that "Medicaid expansion is benefiting many rural hospitals" and that "$600 million in payments were made in the first nine to 10 months of expansion."

Edelen's office is expecting to release its rural hospital financial report, which included input from a series of town-hall meetings across the state last year, "some time this month," Stephenie Hoelscher, Edelen's communication director, said in a phone interview.
Last year, Nicholas County Hospital in Carlisle closed because of financial difficulties. Those living in this county must now travel an extra 30 minutes to reach a hospital, Combs reports.

"Everybody said that the hospital was a Band-Aid station, but still, they saved many a lives in this county," Jimmy Price, who had heart trouble last year, told Combs. "I was on the verge of a heart attack and my son came and took me to the hospital out here and they airlifted me to UK."

Some blame federal health reform and the state's expansion of Medicaid for the problems. Dr. Daniel Mongiardo of Hazard, a former lieutenant governor and state senator, told Combs, "Now that we have all these new patients, more patients that are paying less than the cost of care, these hospitals are burning through money a lot faster."

Many providers in rural areas have reported cash-flow problems caused by delays in payment from Medicaid managed-care companies, lower-than-cost reimbursements and increased administrative burdens.

"Rural hospitals will have to make drastic changes," Foxworthy told Combs. "That means affiliation, partnerships, even acquisitions from a larger company or hospital. We are looking at all options."

WKYT asked Baptist Health and KentuckyOne Health and University of Kentucky Hospital for their positions on helping out rural hospitals in Kentucky.

Baptist Health suggested that these hospitals move toward a community-clinic model and away from acute care. UK said, "We have built partnerships to strengthen many hospitals around Kentucky by helping them build their clinical capabilities in areas such as stroke and heart care." KentuckyOne said "Overcoming the barriers to healthcare across rural communities is a priority."

The closing of a rural hospital has economic impact. Not only do communities lose high-paying jobs, Horine writes, but communities lose tax revenue. Alison Davis, executive director of the Community and Economic Development Initiative of Kentucky at UK, told Horine that money is also lost because of the "multiplier effect" of local money spent in other communities for health care.

The loss of rural hospitals leads to decreased access to both primary and specialty care, Horine notes, as well as ancillary and support services and places an increased burden on local EMS and transportation services.

?Where you live should not determine what kind of healthcare that you get,? Mongiardo told Combs. ?We are moving back in that direction by the changes that we are seeing right now by the struggling rural hospitals.?

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