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Rural hospitals: On the critical list?

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Aug. 25, 2009: Allergy specialist Dr. Theodore Kim uses an electronic medical record (EMR) system on a tablet notebook to manage medical records of patients at his practice in Chantilly, Virginia.

It’s been “probably a decade” since 68-year-old Tom Howell last saw a doctor. A nagging cough and some chest pain finally prompted him to drive 30 miles from his home in Iowa to the closest medical facility, Midwest Medical Center in Galena, Illinois.

"I've been coughing so hard I couldn’t catch my breath. My wife said I had to see the doc, so here I am,” Howell said

He said part of the reason he avoided seeing “the doc” for so long was because he didn't have health insurance. As a self-employed farmer in Iowa, he couldn’t afford it and said he didn’t see a need for it.

But he’s now on Medicare, so doctors bills are less of a concern.

The U.S. Department of Agriculture estimates more than 46 million Americans live in rural areas, working on farms or in small factories that provide resources for the rest of the country.

Often in these less populated areas, there is only one medical facility for the entire community.

Much of the funding for rural hospitals, about 60 percent, comes from Medicare. The rest comes from Medicaid or from general health insurance.

Budgets are so tight for these smaller hospitals, where patients are often older and sicker than the general population, that any changes to these programs -- even slight changes -- can have drastic effects on their budgets.

That's why recent cuts by the Obama administration for Medicare reimbursement funding are a grave concern to rural healthcare administrators. In addition, there's an October deadline for upgrading to electronic medical records. If the deadline isn't met, hospitals risk penalties.

But making the upgrades is not as simple as it sounds, especially for smaller medical offices that are still on pen and paper.

“Going from paper to electronic medical records is a big process," said Dr. Michael Wells of the Midwest Medical Center in Galena. "It takes a lot of personnel and staff and support for information technology just alone, so it's a huge task for a smaller hospital when we don’t have the number of employees to support that."

Midwest Medical Center CEO Tracy Bauer agreed. "It's a huge undertaking. We'll have invested over two million dollars in the project…The expense has been huge, the resources needed for it have also been huge”.

The combination of Medicare cuts and the added expense of transferring to electronic records is part of the reason there has been an epidemic of rural hospital closures. Eighteen have shut their doors since the beginning of 2013, more than closed in the entire decade before then.

“Regulations are always changing, and you look at additional cuts, you look at the federal budget, you look at the state budget and you don’t know when that next cut is going to be" said Bauer. "It’s the difference between you being able to provide access in a rural area to not being able to.”

When rural hospitals close, residents are left with no easy alternative for medical care. Often a drive to a doctor for a checkup can take more than an hour. In an emergency situation, the distance can be a matter of life or death.

"We've saved lives by being here and providing that access here, and a lot times if we're not here, those people unfortunately would not make it in time to the stop that they need to be at, so it's really critical that we're here, able to provide that care," said Bauer.

Care is provided to anybody, regardless of their ability to pay, at many of the critical care centers, which is another reason finances are so tight.

The Affordable Care Act was supposed to alleviate that problem by providing the poor with health insurance and reducing the number of uninsured going to emergency rooms for expensive treatment.

But health experts claim that's not always working out so well.

Brock Slabach from the National Rural Healthcare Association said often poorer people choose the least expensive option among the plans provided under ObamaCare, but still can't afford to pay the deductibles required before doctor visits are covered. As a result, those patients don't go to the doctor regularly, but instead run to the emergency rooms when a medical issue becomes a crisis.

It is the same costly problem that existed before ObamaCare went into effect.

Rural hospital administrators worry the trend of closing hospitals will continue as rules and regulations continue to change.

It is not just the loss of healthcare providers in a community when a rural hospital closes, there also is an economic impact. Medical facilities are often the biggest employer in the countryside, so when one closes, a downward financial spiral for the community begins that could quickly spread into more populated areas.

The National Rural Health Association warned the fate of rural hospitals is a bellwether for the nation's healthcare system.

"I think your rural hospitals are going to be the canaries in the coal mine that lead to disaster for hospitals all over if we continue some of our current trends" Slabach said.

He called it a domino effect: when rural communities suffer, the whole country suffers. "The sustenance of our country's health and well being is produced in the rural areas of our country," he said. "The second we begin to dismiss that is the second that we're going to be very regretful of having lost those resources."