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Rural Hospitals’ Struggles Exacerbated by Pandemic

Those facilities have some of the lowest percentages of available staffed hospital beds in New York. In the five-county Western New York region, just 3% of hospital beds were available in Chautauqua County and only 8% were open in Cattaraugus County.

A sign outside one of a growing number of rural hospitals that are closing across the country.
(AP/Gerry Broome)
(TNS) —Hospitals across Western New York, the state and the country are facing a capacity crunch, the culmination of staffing shortages, a difficulty discharging patients and significant Covid-19 hospitalizations.

Rural hospitals may be even more challenged.

Those facilities have some of the lowest percentages of available staffed hospital beds in New York. In the five-county Western New York region, just 3% of hospital beds were available in Chautauqua County and only 8% were open in Cattaraugus County, based on a seven-day average of state Health Department data updated Tuesday.

In nearby Genesee County, just 7% of beds were available — much tighter than the 24% statewide rate.

Rural hospitals face similar challenges as their larger counterparts — only more magnified in some ways.

For example, smaller hospitals often have a tougher time managing rising costs over time, “particularly if the extra added expense of treating labor-intensive Covid-19 patients does not abate,” Fitch Ratings wrote in a report this fall. That pressure, the credit ratings agency noted, could be heightened in communities with low Covid-19 vaccination rates, which is the environment many rural hospitals operate in.

In addition, amid the staffing shortages sweeping the health care industry, rural hospitals find themselves trying to compete for new employees and traveling nurses against their larger peers.

Luring high-priced agency staff became even more crucial following the “significant impact on staffing” dealt by New York’s vaccine mandate for health care workers, said Mary E. LaRowe, president and CEO at Brooks-TLC Hospital System Inc. in Dunkirk.

“We need to recruit from the same pool that the large cities and urban centers are recruiting from,” LaRowe said. “So we literally end up paying the same salary for some of those very needed positions, but we don’t have the volume to cover our costs.”

Financial pinch

LaRowe, also interim president and CEO of Kaleida Health-affiliated Upper Allegheny Health System, which includes Olean General Hospital and Bradford (Pa.) Regional Medical Center, is concerned that more rural hospitals across the country could close following the pandemic.

Since 2005, there have been 180 rural hospital closures in the United States, including 97 complete closures and 83 that were converted to no longer provide inpatient care but continue to provide some health care services, according to the University of North Carolina’s Cecil G. Sheps Center for Health Services Research.

Further, it appears the financial position of rural hospitals is deteriorating.

Today, 46% of the country’s rural hospitals are in the red, a jump from 39% in 2015, according to an analysis released in February by the Chartis Center for Rural Health. That analysis also found the average rural hospital has just 33 days of cash on hand, meaning it could operate for just over a month if no additional revenue came in the door.

After looking at the two most recent years of financial data available for 1,844 rural hospitals across the country, the Chartis Center found 453 of them are vulnerable to closure in the years ahead.

That reality has caused many rural hospitals to align with or get acquired by larger health systems, giving the small institution a resource-flush partner while allowing the larger player to expand its geographic territory and patient base.

Upper Allegheny Health System’s relationship with Kaleida, LaRowe said, provided access to a staffing agency, which recently allowed Olean General to bring in 33 nurses and open up more beds.

Brooks- TLC, for its part, has a management agreement with Kaleida.

But plenty of financial challenges remain.

Brooks-TLC’s most recent publicly available IRS filings show the hospital lost $12.5 million in 2019. That followed a $4.2 million loss the year before.

As capacity-strained as it is, Brooks-TLC also is one of the 21 hospitals across the state ordered to stop elective surgeries because its staffed bed occupancy rate is above 90%.

Those elective procedures are moneymakers for hospitals. The Chartis Center report notes the average rural hospital relies on outpatient procedures for 77% of revenue.

“That has a huge impact on revenue for small institutions,” LaRowe said. “And so we anticipate we’ll see struggles for the long haul, trying to recover from this.”

Relief funds

Seeking to get funds to financially strapped rural hospitals, the federal government in late November began distributing $7.5 billion in American Rescue Plan payments — out of $8.5 billion available — to nearly 44,000 providers and suppliers who serve rural Medicaid, Children’s Health Insurance Program and Medicare beneficiaries.

New York received the ninth-highest total among U.S. states, with almost $278 million distributed among 2,258 providers.

Several Western New York institutions received some of the state’s largest payments, according to U.S. Department of Health and Human Services data.

Olean General Hospital received the fourth-largest payment in New York, at $7.4 million, while UPMC Chautauqua in Jamestown collected $4.7 million, the eighth-highest payment.

Buffalo’s Kaleida Health was just behind that, with the ninth-highest payment of about $4.5 million.

Medical providers, big and small, also have collected money from another federal fund that was created in April 2020 to cover pandemic-related expenses and lost revenues for health care organizations.

That aptly named Provider Relief Fund, which had paid out more than $119 billion as of late May, doled out another $9 billion across the country in mid-December.

The fund hasn’t been without its criticisms, including from a study published in October that found a disproportionate amount of the payments went to hospitals that were in a stronger financial position prior to the pandemic.

Some of that money, however, has flowed to rural providers, albeit smaller amounts than to larger health care organizations.

For example, Wyoming County Community Hospital received $1.8 million in the most recent round, U.S. Senate Majority Leader Charles E. Schumer announced this month, following a visit to the Warsaw facility in which he called for more federal funding to help communities fighting a surge of Covid-19 cases.

And while Brooks-TLC didn’t show up in the list of American Rescue Plan rural payments recipients, records show the Dunkirk provider has received $10.4 million from the Provider Relief Fund.

The fund’s two largest recipients: $1.2 billion to the New York City Health and Hospitals Corp., and $631 million to New York-Presbyterian Hospital.

Stretched thin

Like Brooks-TLC, UPMC Chautauqua also is on the list of 21 New York hospitals ordered to stop elective surgeries. In fact, most of the hospital’s staffed acute care beds have been full for much of the last two months.

On Wednesday, state data shows, the facility’s 78 staffed acute care beds and three staffed ICU beds were full.

“The demand for services has grown dramatically over the last few months for both Covid-19 and non-Covid-19 related care,” said Brian Durniok, president of UPMC Chautauqua. “The latter is how the situation differs from last year when overall care demand outside of Covid-19 was lower.”

UPMC Chautauqua had 23 patients hospitalized with Covid-19 on Wednesday. The hospital’s Covid-19 inpatients peaked at 38, a number reached Jan. 3 during last winter’s surge and then again on Dec. 4, state data shows.

Complicating rural hospitals’ efforts further are low vaccination rates in the communities they serve.

For example, 60.8% of residents in Chautauqua County have at least one vaccine dose, and the percentage is even lower in neighboring Cattaraugus County, at 54.6%. Allegany County, meanwhile, has the lowest rate in the state, with just 48.3% of residents having received at least one dose.

Durniok said there’s a “cause-and-effect relationship with low vaccination rates and high demand for emergent health care services,” noting 75% of Covid-19 inpatients are unvaccinated. The remaining 25% who are hospitalized and vaccinated are immunocompromised or elderly, he said.

Olean General Hospital, meanwhile, had 29 Covid-19 patients hospitalized Wednesday, a number that had peaked at 53 on Nov. 23, state data shows.

At Brooks-TLC, 17 patients were hospitalized with Covid-19 on Wednesday, a daily count that peaked at 21 in mid-January.

But the highly transmissible Omicron variant threatens to increase those numbers, especially in areas where vaccination rates are low.

That would tighten capacity even more. As of Wednesday, only one of Brooks-TLC’s 34 staffed acute care beds was available and all six of its staffed ICU beds were full.

“We’re all kind of sitting holding our breath to see what the next thing is after the holidays where everybody starts to congregate,” LaRowe said.


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