Rural areas have seen factory jobs disappear while farms become ever larger in order to survive.
That leaves hospitals and schools as a focal point for the economic vitality of some small towns. Now, a new study raises alarms about the future of hospitals in rural America.
Nearly 1 in 5 rural hospitals faces a high risk of closure, according to an analysis from the data firm Navigant. These hospitals are squeezed between aging populations and government health insurance programs that fail to cover the actual cost of care for the poor or elderly.
“Local, state and federal politicians, as well as health system administrators, need to act,” said David Mosley, co-author of Navigant’s study.
In St. Joseph, Mosaic Life Care wouldn’t be considered one of those 430 at-risk hospitals in the Navigant study. But the St. Joseph hospital serves a mostly rural population outside of its primary service area, meaning that Mosaic isn’t immune to the challenges outlined in the study.
In the last year, Mosaic’s leadership embarked on a strategy of regional growth to strengthen its position. A big part of this plan involves Mosaic’s acquisition of the former St. Francis Hospital in Maryville, a move designed to preserve Mosaic’s market share north of St. Joseph and provide opportunities to grow service lines like general surgery, orthopedics, neurology and general medicine.
Bond documents associated with this transaction show that Mosaic plans additional capital projects in St. Joseph, including significant investment in its intensive care unit. Mosaic, in these documents, also disclosed a recent investment in the St. Joseph Center for Outpatient Surgery as well as the planned purchase of the Plaza I and Plaza II medical office buildings on the St. Joseph campus.
The office building purchase has the effect of reducing lease payments, but it also generates concern about medical buildings going off the tax rolls, because Mosaic operates as a nonprofit entity.
It’s a legitimate concern, but one that overlooks the core function of Mosaic and indeed other hospitals that face financial pressure across rural areas. These hospitals must provide a benefit to the communities they serve, but the biggest benefit is derived from an ability to weather turbulent times in a changing, uncertain health-care sector.
Consider that Medicare for All, if it’s structured similar to Medicare for Some, would probably exacerbate rather than reduce the rate of hospital closures in rural areas. It’s something to keep in mind as Mosaic and other hospitals position themselves with financial moves that take a long-term approach.
People don’t want their hospitals to become financially successfully ... until they’re no longer financially viable.