News: Quick Takes

Move to save struggling rural hospitals through loans closer to becoming law

While the fighting over Medicaid and the state budget persists, Republicans’s effort to save rural hospitals with a state-funded loan program will move forward. 

Senate Bill 681 passed the House, 81-31, Wednesday, Aug. 7, and will return to the Senate for concurrence. Over two years, the bill would give $20 million in taxpayer dollars to fund the Rural Hospital Stabilization Act’s loan program. 

“I hate to see one of our county hospitals close,” said Rep Joe Sam Queen, D-Haywood, who talked about one such hospital in his district. “… [I]t is a tragedy for your community to lose their public hospital. I would not wish that on any member here.”

The University of North Carolina health system would administer the program, along with the N.C. Local Government Commission. 

The money would fund construction of new facilities, or cover operational costs while hospitals transition to a new facility. The hospital must share a plan for how to recover financially with UNC Health Care. 

Both Senate leader Phil Berger, R-Eden, who has pushed the bill, and Sen. Jerry Tillman, R-Randolph, have described the loan program as a way to sweeten the deal for larger health-care systems to take over struggling rural hospitals. 

The first in line for such a loan will likely be Randolph Health in Asheboro.

Randolph Health lost $4.17 million in 2016, bled $10.6 million in 2017, and has been losing money since. After a potential partnership with Cone Health fell through in 2018, Randolph Health has been looking for partners. So far, it hasn’t found success. 

“This was a difficult decision, but one that we believe to be in the best long-term interests of Cone Health,” said CEO of Cone Health Terry Akin in a statement. “After much consideration, we found that combining our organizations would require that many current and future Cone Health priorities and projects would need to be scaled back or put on hold. Cone Health’s overall strategic commitments and our current competitive environment do not give us the latitude to move forward with Randolph health at the present time.”

As Cooper has pushed Medicaid expansion as a panacea for rural health-care woes, Berger has pushed the rural loan program as an alternative  to saving rural hospitals. In the House on Wednesday evening, Democrats repeatedly pointed to Medicaid expansion as a more permanent solution.

“This little hospital needs that $20 million from each of their reps to sustain it, to cover uncompensated care, so that it is a viable institution serving the people of their community,” Queen said. “I want you to realize what we are doing by delaying expanding Medicaid.”

Across the nation, 113 hospitals have closed since 2010, and six of those hospitals shut their doors in North Carolina, according to the Cecil Sheps Center

Still more are at risk. One in five rural hospitals across 43 states are at high risk, meaning 430 hospitals will fold unless their finances improve, according to a Navigant study

Communities who lose their only hospital lose economically, as well. Studies indicate that incomes fall by 4%, and unemployment increases by 1.6 percent.