‘We are at Risk ‘: Report Shows 22 Rural Oklahoma Hospitals Could Close Amid Challenges

KOKH - February 21, 2024 6:26 am

A new report shows 22 rural hospitals in Oklahoma are at risk of shutting down.

According to the Oklahoma Hospital Association, closures can limit access to care and can spell trouble for rural economies.

Rich Rasmussen, president and CEO of the OHA, shared that one challenge impacting rural hospitals is the growing popularity of Medicare Advantage Plans.

Chartis Healthcare Consulting, which published the February report, agrees.

The group noted that while traditional Medicare coverage has predictable reimbursement rates for services provided to patients, the advantage plans can pay less to providers.

According to Rasmussen, “We are at risk in our rural communities. And what we’re hopeful is that Congress, and certainly our legislative delegation… will continue to stand up for us, and certainly here in the state legislature, they’ll continue to stand up for rural hospitals.”

Michael Topchik with Chartis’s Center for Rural Health Chartis argued that leveling the playing field with reimbursements between Medicare and advantage plans—along with streamlining payments—would make a huge difference for rural hospitals.

In his view, “There are huge fixed costs in running a hospital, and the free market does not cover those costs in the smallest, most rural hospitals.”

Chartis stressed that rural hospitals won’t make it without subsidies.

According to the firm, the 22 rural Oklahoma hospitals at risk of shutting down represent about a third of the total rural hospitals in the state.

68 percent of such facilities are currently operating at a loss.

Their median operating margin is -4.5%, Topchik added.

Oklahoma has the fourth-highest number of at-risk rural hospitals of any state in the nation, according to Chartis.

“Hospitals are the single largest industry in our state, generating more jobs than any other industry, including the energy industry. So we know that where hospitals are located in their communities, they are a major economic driver,” explained Rasmussen.

Chartis added that Medicare Advantage Plans denying swing-bed care has also taken a dent out of rural hospitals’ bottom lines.

The service allows patients to get nursing care without having to leave the hospital.

Instead of moving to a rural hospital closer to home for swing-bed care, those on advantage plans sometimes stay in urban hospitals longer, according to Chartis.

The group shared that Oklahoma has already lost ten rural hospitals.

While Chartis says the future looks challenging too, the hospital association is a little more optimistic since the state expanded Medicaid.

Rasmussen also explained that 340B drug pricing is essential to get drugs to rural and low-income areas. A bill aiming to protect the program in Oklahoma passed a House committee unanimously on Monday.

 

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