News: Quick Takes

Governor signs rural hospital loan program into law

Struggling rural hospitals are in luck. 

Gov. Roy Cooper has signed the rural hospital loan program into law. Senate Bill 537 creates a $20 million loan program, which will funnel taxpayer dollars to distressed rural hospitals. The program will operate under the University of North Carolina and the N.C. Local Government Commission. 

The money for the fund remains in limbo. Legislators never included funding for the program in S.B. 537, but the bill’s sponsors promised to establish the fund in a separate bill. 

The first hospital to receive an injection of money will likely be Randolph Health in Asheboro. 

The hospital dominated debate over the bill, as state legislators worried it would collapse without help. Randolph Health lost $10.6 million in 2017, and its potential partnership with Cone Health flopped in 2018.  

Under S.B. 537, hospitals that need to build or move to a new facility will now be able to apply for a loan. To qualify, they must present a plan to recover financially to UNC Health Care.

The bill became law only after several false starts and some squabbling between the Senate and House. The Senate passed similar legislation twice before, but sunk the previous incarnations after complaining that the House tinkered with the bill. 

The bill also focalized debate over Medicaid expansion. Democrats argued that such a loan program wouldn’t be necessary if the state expanded Medicaid. They also said the loan program wasn’t a permanent solution. 

Republicans presented the bill as an alternative to expansion that still preserved rural hospitals.

More than 100 hospitals in the U.S. have closed since 2010, including six in North Carolina, according to the Cecil Sheps Center. When a hospital closes, studies indicate incomes drop 4%, and unemployment rises 1.6% in the surrounding community.

The legislature reconvenes later this month to tackle redistricting, pending conference committee reports, and vacancies. If funding for the loan program isn’t pushed in a conference report, it will have to wait until January 2020.