Small hospitals find it harder to keep doors open. Rising costs, lower federal payments squeeze budgets

When a shooting victim pulled up at the hospital in this central Texas town one day last summer, there was no emergency room waiting to take in the bleeding patient. Instead, a doctor came out through locked doors to treat the man's wounds in the car, before sending him on to Austin 20 miles away for further care.

Earlier that day, after hanging on for years through skyrocketing expenses, reduced medicare reimbursements, changes in Americans' health-care preferences, and bouts with poor management, Bastrop's hospital had closed down.

To many of this town's 5,000 residents, the event is a singular loss. But it is being repeated with increasing frequency in rural areas across the country, and especially here in Texas, as rural hospitals that have served their areas for decades lock their doors.

Nationwide, more than 200 hospitals closed between 1985 and 1987, about half of them in rural areas. Texas has led the nation in hospital closings in the past two years.

Over the 1985-87 period, Texas lost 52 hospitals, 29 of which were the sole health-care providers in small rural towns. Already this year, at least 15 have closed. As many as 10 more could close by the end of the year.

What is being called a crisis in rural health care has its greatest impact on the elderly, who often lack the mobility to seek medical care in distant cities, health-care experts say. But cases like that of the Bastrop shooting victim point out that anyone using a hospital emergency room - from farmers and hunters to drivers on rural highways and country roads - is also affected when an area's only hospital closes.

More than 40 Texas counties now have no hospitals, while 14 of those counties - mostly in sparsely populated west and south Texas - also have no physician.

``We have a crisis in Texas, and it's not just a rural problem,'' says Jim Bob Brame, chairman of the state's special Task Force on Rural Health Care Delivery, and a physician in rural Eldorado. ``It's taking a toll on the thousands and thousands of Texans who travel through rural Texas.''

Moreover, the hospital closings, in part a result of weakened rural economies, only add to the syndrome of impoverishment. ``Our county is talking about appointing a specialist in economic development,'' notes Ben Snead, chief administrator at Lee County Memorial Hospital in Giddings, Texas. ``But they aren't going to need him if we don't stay open. Who's going to move a business to a town that doesn't have a hospital?''

Mr. Snead says his 32-bed hospital, now a nonprofit corporation, will ``close the doors and sell its assets in short order'' if voters do not approve a county hospital district this week.

Rural hospitals are facing unprecedented difficulties for several reasons. Young families increasingly favor the kind of specialized service available only in larger cities. Insurance costs are driving physicians away from areas where large incomes can't be made. Rising costs and falling patient loads are catching up with poor management and excess beds.

But health-care experts say the biggest problems stem from the federal medicare program for the elderly, and the state-federal medicaid program for the poor.

Since 1983, when medicare began paying prescribed amounts for specific treatments and interventions, the program has paid as much as 40 percent less to rural hospitals than to their urban counterparts for the same services.

Even those payments made to urban hospitals are significantly below their actual cost, according to Paula Bailey, president of the National Committee for Quality Health Care. But city hospitals have more patients with private insurance to whom they can shift a part of the cost of serving government-backed patients, she says.

Even though rural hospitals are paid less for the same services provided in urban hospitals - supposedly because rural costs are lower - a 20-bed facility is required to meet the same expensive standards as a 200-bed facility, Snead says.

``I think they were trying to keep the big hospitals open in the metropolitan areas, and force the rural people to come in to them,'' says Jack Griesenbeck, chairman of the Bastrop Hospital board. ``But that's really doing in our small towns, and it's no way to take care of our elderly.''

Bailey and others say they note a new sensitivity to the problem in Congress. But solutions must begin largely at the local level, health-care experts say.

Dr. Brame says ``networking'' of small hospitals with urban facilities is one approach having success in some parts of Texas. Another key, he says, is community involvement: bringing citizens together with federal and state officials, local universities, and other agencies to determine what each area needs and can afford.

In Giddings and surrounding Lee County, east of Austin, a campaign is under way to educate voters on the costs and benefits of a seven-cent hospital district tax, which would cost the owner of a $75,000 house $60 a year. County officials say they believe that in the long run it would be cheaper to taxpayers to keep the hospital open, than to close it and pay for required emergency and indigent services otherwise.

``There's no question the rural areas have to start paying their own way,'' says Lee County Memorial's Snead. ``Rural hospitals are going to exist for two basic reasons: the elderly and emergencies. But if it's not worth $50 to you [in taxes], then maybe we don't need these hospitals.''

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