The state agency that licenses medical facilities changed its rules this year to allow a rural hospital that’s failing or has already closed in the last year to scale back its operations and reopen as a freestanding emergency room. Before, emergency departments were only allowed at full-service hospitals that fulfilled criteria including having inpatient beds and other expensive requirements.
Georgia’s leaders backed the rule change allowing stand-alone ERs after three rural hospitals closed in 2013. Many are taking financial losses.
“A hospital closes now, particularly in a small, rural community, there’s nothing. Nothing,” said Clyde Reese, commissioner of Georgia’s Department of Community Health. “So this is an attempt to have something — some service, some infrastructure — left in a community so all the doctors won’t leave, so the EMS services won’t leave and follow the facilities.”
Many other states already allow stand-alone emergency rooms, but health care analysts say they aren’t aware of the model being pushed as a way to keep struggling rural hospitals from going under. Among the hundreds of stand-alone ERs operating elsewhere, many are in affluent suburban areas where patients can afford to pay the higher bills.
Moody’s Investors Service predicts hospital revenues will drop as government payments decrease, fewer patients are held overnight and private insurance plans pay less. Its analyst said more patients are choosing high-deductible plans. Those plans could discourage people from seeking pricey care and raise the risk they won’t be able to afford their hospital bills. While all hospitals face these problems, small hospitals have the least cash as protection.
About half of all states, including Georgia, have refused to expand Medicaid under the Affordable Care Act, further adding to the pressure on hospitals.
“While Medicaid doesn’t pay as well as other payers, it’s better than nothing,” said Jennifer Ewing, a Moody’s analyst.
The challenges are evident in Macon County, an agricultural region in central Georgia with fewer than 15,000 residents. Unemployment remains at nearly 14 percent, and more than half of residents in 2012 had no health insurance or relied on the government to provide it.
Flint River Hospital had reported for years it was saddled with unpaid bills and it was underpaid by government-run insurance programs for the poor and elderly. It closed its emergency room last year, the only one in the county.
Macon County has doctors and an urgent care center, but it is missing an emergency room where people can go for around-the-clock care.
Among the new requirements for scaled-back ERs in Georgia, the facilities would have to offer 24-hour care and treat all uninsured patients. They could be no more than 35 miles from a full-service hospital. They would also be required to have agreements explaining how they would transfer patients who need more intensive help to a hospital.
“They need a close facility,” said Dawn James, a counselor in Montezuma. “.... You’re having chest pains, we have to drive now at least 30 minutes. At least. And that’s if you don’t get behind a tractor or bus.”
James recently drove her friend, Delois Smith, to the nearest hospital after Smith suffered a stroke. Smith does not own a car and hesitates to call for an ambulance since has no health insurance. She wants the old emergency room back.
“They closed it down last year and it was like, ‘Where are we going now?’” Smith said.
The CEO of Flint River Hospital, Michael Patterson, said he will explore whether the new rules could allow the re-opening a scaled-back ER. He started working there after the ER shutdown.
“The America of yesterday paid for rural hospitals to be here and to be in existence. But America has changed,” Patterson said. “... And that doesn’t make it better for the people who are here, and I understand that. But I also understand that a government entity or any entity cannot operate an emergency room without someone funding it. And people say, ‘Oh, well, it’s all about money.’ Well, isn’t it always about money?”
Many have doubts about whether the stand-alone ERs can thrive in rural Georgia. Among them is Jimmy Lewis, who lobbies for a coalition of more than 50 rural hospitals as CEO of Hometown Health.
As a rule of thumb, Lewis estimates it takes a population of 40,000 people to support a hospital without a subsidy — about twice the population of Macon County.
A consultant who has studied freestanding emergency rooms, Dr. Ron Hellstern, said they might work in rural areas if the small emergency rooms arrange a business partnership with a larger regional hospital. A large hospital might subsidize losses at a rural emergency room if the ER generated lucrative medical referrals for the big hospital. But Hellstern said downsizing hospitals into emergency rooms is one of many regulatory and legal tactics that political leaders use to shift around the cost of indigent care.
“It keeps us as a society from actually recognizing the magnitude of our generosity and what its impact on society is,” he said.
Still, officials in Macon County want alternatives. The head of the county’s development authority, Jimmy Davis, helped draft a financing plan for doctors interested in opening a practice that could treat a handful of patients overnight. It remains unclear whether that facility might fit under the new rules.
Having an emergency room helped bring a manufacturer to the job-starved county before the recession. He worries what will happen the next time a potential employer asks whether there’s a nearby emergency room.
“If you’re competing with another community they’ll go down their list, they’ll go to another community,” Davis said.