October 28, 2020
So long as we could say, “Healthcare is a business,” we could continue to avoid the moral and ethical choices from which such statements shield us.
But then COVID-19 came into the picture and the bottom dropped out of healthcare as a business. Hospitals and health systems are hemorrhaging money; the American Hospital Association estimates total losses will exceed $300 billion by the end of the year.
“The growing number of cases is threatening the very survival of hospitals just when the country needs them most,” writes Bloomberg News. “Hundreds were already in shaky circumstances before the virus remade the world, and the impact of caring for COVID-19 patients has put hundreds more in jeopardy.”
Nowhere are these dire illustrations of American healthcare during COVID more impactful than in the country’s rural areas, most of which struggled mightily even before there was a pandemic. Predominantly white small towns and unincorporated areas are where so-called diseases of despair—alcoholism, drug addiction, suicide—are at their worst. To say the closing of a hospital in these areas adds insult to injury dramatically undersells the devastation.
Since 2005, more than 170 rural hospitals have closed in America; 18 of those shut down in 2019 alone and 14 closed by mid-August of this year. When a rural hospital closes, it doesn’t just make lifesaving care more difficult to get, but it certainly does that. According to a University of Washington study, rural hospital closures drive up mortality rates in the surrounding community by about 6 percent. Comparable urban closures have no discernable impact on mortality.
Immediate access to the care a full-service hospital with specialists provides may have made the difference for Robert Finley. A resident of Fort Scott, Kansas, which lost Mercy Hospital in February 2019, Finley fell and hit his head shoveling snow and then went to sleep with what turned out to be a brain hemorrhage. During a week in the hospital, he never regained consciousness.
“When this kind of trauma happens, time matters,” explains Sarah Jane Tribble on Kaiser Health News’s Where It Hurts podcast. “It takes time for the medevac operator to find a pilot to come for Robert. The pilot then has to get there. Once he’s arrived, he still has to transport Robert to Kansas City.”
Hospital closures also blow a sizeable hole in the surrounding community. These facilities are often one of the largest employers. The hospital itself and employees—well-paid physicians among them—are a crucial part of the tax base. Satellite facilities like clinics and dialysis centers, not to mention other local businesses with which the hospital contracted, often disappear shortly after the hospital shuts down.
The challenges a hospital closure creates are often placed before people who can least afford yet another obstacle.
“By one estimate, socioeconomic factors account for 47 percent of health outcomes,” write George Holmes and Sharita Thomas in the AMA Journal of Ethics. “Poverty and inadequate transportation are two important social factors that make rural residents particularly vulnerable to a hospital closure. Rural residents experience higher rates of poverty than do urban residents and can live in communities of ‘persistent poverty,’ where the poverty rate is at least 20 percent over approximately 30 years.”
Holmes and Thomas, acknowledging that healthcare is a business, suggest that the ethical approach to closing a hospital is to engage the community as a partner throughout the process. Will emergency services still be provided after the hospital is gone? Can transportation challenges be mitigated? What will the closure do to the job base?
These and many other questions are valid. With COVID-19, however, there emerges another question that was less frequently discussed pre-pandemic: To what extent is a hospital a public good more than it is a business?
“Coronavirus is definitely a reminder that health care is, in fact, a public good,” says Dan Mendelson, founder of healthcare advisory consultancy Avalere Health. “We all have a vested interest in making sure that everybody around us is seeking appropriate medical care at the right time.”
That public good, Mendelson explains further, is not limited to the current COVID-19-fueled scenario. When people don’t have insurance or access to care, they tend to wait until their health gets much worse before seeking treatment, which guarantees either very expensive treatment or mortality. Regular exams enable early treatment, which gives clinicians the opportunity to manage illness more efficiently, effectively, and affordably.
Still, nothing illustrates the idea of healthcare as a public good quite so elegantly as a pandemic. And while many people initially thought COVID-19 would mercifully avoid adding to the struggles of rural Americans, it’s become clear that the virus does not discriminate based on geography.
The current scenario in rural America hastens the country’s reckoning with a fractured healthcare system that leaves too many sick or bankrupt or both. This day was always coming, after all.
What’s necessary to ensure the availability of care in America’s rural areas is the resolve to ensure it exists. Calling it a public good may help sell it, but ultimately what it’s called matters less than that it’s there. In many ways, the fate of rural hospitals is a test of America’s commitment to rural life as more than an exercise in economic viability. Certainly, the food produced in rural areas is a public good we’re willing to subsidize. Is not healthcare also?
The good news is that many of the ideas bandied about as solutions for the broader healthcare crisis will lift up both urban and rural hospitals and providers.
As former National Coordinator for HIT David Blumenthal and others write in a recent New England Journal of Medicine article, capitation is one payment approach that may help chronically underfunded facilities improve financial viability.
Beyond creative payment schemes, resolve manifests as public policy.
“If reduced prepayments nevertheless threaten the availability of critical services, additional public policies may be necessary to subsidize providers whose losses might jeopardize the health of communities,” Blumenthal, et al, write.
If what matters in economics is the numbers, what will ultimately matter in moving away from a predominantly economic approach to healthcare is also the numbers, but in terms of casualties. The economic approach couldn’t keep tens of thousands from dying of COVID-19 in hospital-rich urban areas, so it’s a bad argument for letting the rural poor expire because the local hospital can’t break even.