Multiple factors lead to hospitals closings in rural Missouri

By Hunter Bassler, Haley Broughton, Yanran Huang and Joe Ward

Hospital Closure - Hunter Bassler, Haley Broughton, Yanran Huang and Joe Ward
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It is a long drive from Osceola to pretty much anywhere. It’s even longer when you have a loved one in the car that needs the kind of medical attention they can only get at a hospital. 


Osceola has 900 people in it – and its hospital closed 2014. It’s not a unique situation. Three rural Missouri hospitals have closed since 2010.  It’s not just about healthcare. It’s also about jobs in a small town and whether a hospital is a business, a community institution or both. 


A main reason rural hospitals close is from a lack of patients said Thomas C. Ricketts, who researches rural healthcare at the University of North Carolina. 


“It’s a volume issue for one thing,” Ricketts said in a phone interview. “There are certain requisite numbers of patients that have to come through to generate the income that supports a fairly complex array of services.”


Sac-Osage Hospital, which closed in 2014, served 11 townships with a combined population of around 3,000 people. In contrast, three large hospital systems in the crowded healthcare market of Columbia, Missouri, compete for more than 100,000 potential patients.


Ricketts also attributes a lack of Medicare benefits as a reason for rural hospital closures.


“Small rural hospitals don’t tend to get the benefit of enhanced payments under the Medicare program,” Ricketts said. “It actually discriminates to some degree against them.” 

According to a study by the RUPRI Center for Rural Health Policy Analysis, the lack of benefits from Medicare is partially because 65 percent of rural physicians will accept all new Medicare patients, even though 51 percent report they “have enough patients,” and 46 percent report they are “inadequately reimbursed.” 

So even though over half of rural doctors say they do not need new patients and nearly half say they do not make money off Medicare patients, a majority of rural doctors will take new Medicare patients. The RUPRI center guesses this occurs because of the trends in rural physicians' behavior. 


The study said, “Rural physicians may feel a stronger sense of commitment to community, or alternately, may be more sensitive to negative community perceptions associated with a practice closed to new Medicare patients. Patients in a small rural community practice may tend to be ‘lifelong’ patients. When they age in place and become Medicare beneficiaries, their physician may be less likely to turn them away.”

According to Mark Holmes, a rural healthcare researcher at the University of North Carolina, a lack of insurance can also be crippling to a hospital’s existence.

“If I have a $5,000 deductible on my own plan and I'm admitted to a hospital, I get a bill of, well, $12,000. I am responsible for the first $5,000 of that,” Holmes said. “Many people can't afford $5,000 so that's certainly a part of it and that's going to be a bigger factor, for example, in lower income communities.”


The same report said, “Uninsured rates in 24 of the 101 rural counties exceeded 20 percent in 2013.” 


Besides a lack of insurance, poverty is also a problem in rural Missouri. While Medicare does give benefits to those with low income, the 2015 Biennial Report stated, “Low income and poverty limit a person’s ability to pay for a variety of goods and services related to health, such as doctor visits, healthy foods and medications.”  


The 2013 Missouri rural poverty rate was 27.8 percent higher than the urban rate.


These factors cause major problems for hospitals because when people don’t pay bills the hospitals are working at a deficit. This leads to hospitals cutting back on purchasing equipment needed to meet modern standards. 


As of 2014, all public and private healthcare providers were required to adopt and demonstrate “meaningful use” of electronic medical records in order to maintain their existing Medicaid and Medicare reimbursement levels.


Candi Baker was a nurse at Sac-Osage Hospital. She said a main reason Sac-Osage closed was because they could not keep up with requirements like this. 


“There are certain measures that they had to be met at certain points,” Baker said. “And you had to have the IT to back that up. And if you couldn't afford that complexity, you would fall behind. And so those things made it a little tough for all hospitals. I mean for any system now to maintain the IT is amazingly expensive.”