Seven Idaho rural hospitals could be at risk for closure

Seven Idaho rural hospitals are at risk of closure, according to a study released in January of such hospitals.

The risk assessment was based on finances from 2017 through 2019. Because of the pandemic, the financial situation of most rural hospitals across the county has deteriorated even further.

The study’s financial criteria for risk of closure was defined as cumulative negative total margin over the three-year period of 2017 through 2019, based on the most recent financial records available through the Centers for Medicare & Medicaid Services for the nation’s rural critical access hospitals.

The study was authored by Harold Miller, founder and CEO of the Center for Healthcare Quality and Payment Reform, an independent research organization based in Pittsburgh. Miller describes himself as “semi-retired” because of his ongoing work with CHQPR. He is officially retired after a career in both academe and public service, including several years as a dean at Carnegie Mellon University.

“I started CHQPR to address our broken system of paying for health care,” Miller told the Idaho Business Review. “I wrote the rural hospital report prompted by a request from some critical access hospitals in eastern Washington.”

Miller was emphatic that the study does not identify by name any at-risk hospital. It simply counts up the number of hospitals in every state with multiyear operating losses, according to CMS records: “The study looks at both patient services and overall operating margins and shows that that closures are tied to multi-year losses in both. It doesn’t name any hospitals because there are those that stay open because of other funding sources.” As examples of external funds keeping a hospital afloat, Miller cited taxes for entities like county hospitals and revenue sharing within a solvent healthcare system supporting an in-system rural hospital in the red.

The at-risk definition applied when a rural hospital had three years of losses in both patient services and overall operations. The study counted seven hospitals in Idaho which met this “at-risk” criteria. In the IBR examination of the data used by the study, the seven institutions that fulfilled the at-risk definition were Benewah Community Hospital in St. Maries, Caribou Memorial Hospital in Soda Springs, Clearwater Valley Hospital in Orofino, North Canyon Medical Center in Gooding, Saint Mary’s Hospital in Cottonwood, Steele Memorial Medical Center in Salmon and Syringa General Hospital in Grangeville.

The table below summarizes the study’s data for Idaho. The three rural hospitals in the St. Luke’s Health System were removed because they are part of the largest health care provider in the state.

Jeanie Gentry is the CEO of Steele Memorial in Salmon. She is also a member of the board of directors of the Idaho Hospital Association. She was frank about the challenges of running a rural hospital in Idaho. “There are 19 critical access hospitals in Idaho operating in the red on a fairly regular basis,” she told the Idaho Business Review. “This is not an unknown problem.”

Regarding her own hospital as one of the “at-risk” Idaho hospitals, she added: “Steele has not always been in the red, but it was for those three years (used for the study). We did okay in fiscal 2016 but we faced a staffing crisis starting in 2017 (to keep and attract professionals) and we had to raise wages to stay competitive. That started a series of unfortunate events for the next two years.” Those pay problems affected the bottom line because the hospital’s largest expense is for labor.

As the only hospital for two hours in any direction, Steele’s leadership made a commitment to maintain a high-standard of care. Steele is owned by Lemhi County but it also serves the northern half of Custer County and the ranches and small farming communities of southwestern Montana. “We decided that we would always have physicians available in our emergency room, rather than relying on nurse practitioners or physician assistants. For a small county hospital, that adds up … We did much better last fiscal year,” Gentry added.

“We rarely have more than 10 patients (in inpatient beds) … We provide a needed service, and yet we are in a difficult place to do that on our own without a financial partner.”