There’s a narrative going around – one that’s repeated mostly by big health insurers and the politicians in their pockets.
The story is small hospitals are being swallowed up by big hospitals. And while it’s tempting to reduce this to a sinister game of Pac Man… it’s actually not quite so simple. The reality is that saving hospitals saves lives.
In North Carolina, rural hospitals have had it particularly rough. The state recently came in third on the list for the most hospital closures since 2005. And according to a March 26th article by North Carolina-based news source WNCT, rural hospitals in North Carolina have sicker and poorer patients than urban hospitals.
The article also cites a 2021 Chartis Center study, which predicts that by 2023, 25% of rural hospitals across the county may close their doors. According to the Chartis Center, seven rural hospitals closed in North Carolina alone since 2010. Two of those hospitals were located in the Triad. Researchers predict that by next year, between 26% and 30% of rural hospitals in North Carolina could go under.
One big reason rural hospitals are at risk for closing? Lack of funds—and federal funding from the COVID pandemic, especially, is dwindling. But an even bigger reason is impractical reimbursement from health insurers. They use their large scale to strongarm providers into providing services at unfairly low rates. While hospitals have played the game for so long, insurer tactics makes it unsustainable for hospitals that are smaller and located in poorer communities to continue providing care.
So, what are these rural hospitals to do? Thankfully, North Carolina’s Office of Rural Health (ORH) offers a Rural Hospital Program, which has helped 32 hospitals across 23 of the state’s rural counties. The only problem is that this program is limited to hospitals with less than 49 beds.
It leaves a lot of hospitals at risk. One example is Randolph Health, which was about to close its doors until it partnered with Tennessee-based American Healthcare System. Now, Randolph Health can continue to serve its community, with the backing and support of a bigger system.
Health insurers – usually the biggest ones – like to criticize health systems for partnering with smaller, rural hospitals, but often, these hospitals are facing extremely tight margins and are forced to make tough decisions to keep their doors open.
This narrative distracts from the fact that those same big insurers do the same thing—but not to keep hospital doors open. We’ll just add that while the state’s rural hospitals are floundering, Blue Cross Blue Shield of North Carolina (BCBSNC) made $569.3 million in 2021.
So while big insurers are busy staking claim on the Monopoly board that is the insurance marketplace, rural hospitals are trying to save lives—while also trying to survive themselves.