Is there a way to save rural hospitals? – IJR

The Harris-Walz campaign revealed her plan to stimulate large government programs to attract doctors to rural hospitals. But will rural hospitals remain?

Recruiting doctors and nurses to live and work in rural communities has been a challenge for decades. But that challenge pales in comparison to the dangers Medicaid expansion poses to rural health care, particularly the continued threat of closing rural hospitals.

Since Obamacare was passed in 2014, 40 states they expanded Medicaid beyond the traditional populations of seniors, people with disabilities, and children from low-income homes to include working-age adults. The income limits for these able-bodied people exceed the poverty line, and most of these welfare recipients it doesn’t work at all. This expansion has steadily eroded the safety net, high-quality health care, and state budgets.

Able-bodied adults—who could get free or heavily subsidized health coverage through exchange plans or employer-sponsored plans—joined the service line alongside truly needy populations who rely on the program.

Waiting lists remain long for vulnerable people and health outcomes have not improved. In addition, many high-quality medical providers simply do not accept Medicaid. State budgets have been destroyed time and time again by actual Medicaid expansion costs destroy projectionsleaving less money in state budgets to pay for other crucial services such as schools and public transport.

Health care is a rapidly dwindling resource in the nation’s rural communities, and Medicaid expansion has hurt, not helped, those rural hospitals.

Hospitals don’t run on goodwill and fairy dust. They must cover their costs of providing services, and an influx of patients switched from private health coverage to lower reimbursement rates under Medicaid (about 60 percent of what private health cover reimburses) means significant budget shortfalls for hospitals, especially those in rural areas.

Hospitals in non-expansion states simply perform better. Between 2013 — before the expansion — and 2021, profits at expanding state hospitals fell by two-thirds, shrinking profit margins from 6.2 percent to just 1.4 percent. Meanwhile, hospitals in non-expansion states saw their profits rise more than double and saw their profit margins rise to seven percent.

The Harris-Walz team’s plan aims to bring more health workers to rural areas. But that effort is irrelevant if hospitals can’t bring in enough revenue to stay operational.

Almost 50 hospitals in Medicaid expansion states closed their doors between 2014 and 2022 due to financial challenges. In rural expansion hospitals, which remain open, one in four is at risk of permanent closure. Dramatic shortages at these hospitals have forced providers to make difficult decisions about reducing hours, cutting jobs or closing their doors altogether.

Governor Tim Walz’s home state of Minnesota is no exception. It expanded Medicaid in 2014, shortly after Obamacare was passed. More than two thirds of Minnesota hospitals have negative operating margins. Forty-five percent of Minnesota’s rural hospitals do not offer maternity care, and another rural hospital closed its inpatient services — with a greater risk of closing or limiting services — leaving even fewer hospital beds for those who need them.

Not surprisingly, Minnesota spends a significantly higher percentage of its state budget on Medicaid than other states—over 30% of its budget expenses— and pay the price for closed or severely limited access to rural hospitals.

Without addressing the dramatic influx of able-bodied adults into a program aimed at vulnerable populations, no amount of grants, scholarships or loan forgiveness will be enough to attract doctors to hospitals at risk of closing.

The diagnosis is simple, and the prescription is clear: Medicaid expansion isn’t helping rural hospitals stay open. Instead, it makes them close even faster. State and federal leaders must get serious about scaling back Medicaid expansion to millions of able-bodied adults and refocusing the program on the truly needy. Until then, no amount of campaign promises or taxpayer-funded bandwagoning will bring America’s rural communities the health care they need.

Hayden Dublois is director of data and analytics at the Foundation for Government Accountability.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

(Featured Image Media Credit: Screen Capture/PBS North Carolina Channel)