Rural health care: Closed hospitals only part of problem

Pearce Hospital died in the Southern Illinois city of Eldorado at 12:01 a.m. on March 18. It was 40 years old. Pearce had been placed on the critical list two weeks earlier by its Board of Trustees. At that point, the prognosis was certain, and the hospital succumbed to a declining patient load and financial difficulties.

Complications included cost pressures from the government agencies and insurance companies that paid the bills. Difficulty retaining enough physicians to fill the hospital's beds was a contributing cause of death.

Survivors included Ferrell Hospital two blocks away in Eldorado and still another, Harrisburg Medical Center, seven miles down the highway. The health of the people of Eldorado should not be

Rural Illinois hospital closings since 1980 (dates are when closed for inpatient service): Hillman Memorial Hospital, Manteno, December 1983. Southern Medical Center, Cairo, December 1986. Beardstown Hospital, December 1986. Paxton Hospital, Paxton, September 1987. Saunders Hospital, Avon, September 1987. White Hall Hospital, August 1988. Pearce Hospital, Eldorado, March 1989. Sources: Illinois Department of Public Health and Pearce Hospital Foundation Inc.

affected since the other facilities are so close, so while the loss may have been a psychological blow, healthcare policymakers did not mourn the passing.

Pearce Hospital was preceded in death by six downstate hospitals, mostly rural, in a little more than the past five years. Many more have curtailed services such as obstetrics and have closed entire floors or wings. The hospital closing immediately preceding Eldorado's was White Hall Hospital in August 1988. Residents of that community, some 50 miles southwest of Springfield, are now forced to travel 10 or 20 miles to Carrollton, Jacksonville or Jerseyville for basic hospital services.

The most ardent defenders and sharpest critics of hospitals agree on one point: More institutions will close during the 1990s. "We've seen a few close," observes Jacquetta Ellinger, associate director for health policy and planning at the Illinois Department of Public Health. "How many more can we see close and not have a crisis? I don't know."

As the most visible symptoms of the ailments plaguing rural health in Illinois, hospital closings will continue to get lots of attention — the kind that spurs political and government activity:

• A Rural Health Task Force has been established under the aegis of Lt. Gov. George H. Ryan's Rural Affairs Council. The panel, composed of public and private representatives from every conceivable interest in rural health, plans to issue recommendations before the end of the spring legislative session.
• A similar panel has been convened by the Illinois Farm Bureau, which got active in the issue about a year before the lieutenant governor's 1988 task force. It has surveyed rural residents and plans to conduct a rural health education campaign as a demonstration project. It will tell people in the targeted rural area what resources are available and how they can best be utilized.
• Legislators are becoming increasingly active, and their interest is bipartisan. Legislators with a long history of giving priority to the issue include two southern Illinoisans: former state Sen. Glenn Poshard (D-59, Carterville), now a member of Congress, and Rep. David D. Phelps (D-118, Eldorado). But rural health has attracted two rising stars of both parties. Those legislators, Reps. Thomas J. Homer (D-91, Canton) and Tom Ryder (R-97, Jerseyville), are promoting legislation to help rural hospitals plan for survival.
• A Center for Rural Health was started in February within the Illinois Department of Public Health. It is designed as a sort of one-stop shopping place for rural communities that need held and provides a base from which rural health advocates can lobby on behalf of their interests with the General Assembly and the bureaucracy.

The new-found interest, and any policy changes that actually result from that interest, extends far beyond hospitals. Though most visible, hospitals are only part of the story. It also involves the front-line troops of medicine —physicians — and such basic issues as transportation to medical services. Overwhelming everything is money.

Public perception, availability of doctors and money affected almost all the hospital closings in the 1980s. Each of those factors is affected by other forces — such as malpractice premiums in the case of doctors or inability to afford the latest high-tech equipment at every hospital — and all have some effect on each other.

Changing ways of practicing medicine, driven largely by technology, are affecting health care everywhere. People are spending less time in the hospital and more time getting treated as outpatients in doctors' offices, ambulatory surgery centers, or with mobile medical equipment transported from town to town. That means a smaller pool of patients for hospitals. When people do go to the hospital, they tend to bypass their local institutions and travel to places where they think the care is better, just as cities are attracting people from broader bases to do their shopping. The propensity to travel more frequently and the perception that technology and more specialized doctors mean care is better in urban centers is a tough combination for rural hospitals to counter. "You can support the hell out of your local

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hospital until you have acute appendicitis or you have to have your gallbladder out," says Raymon V. Robertson, assistant dean for regional medical programs at the Southern Illinois University School of Medicine. Then, the attitude becomes, "I want to go to Evansville [Ind.]."

The most significant money issue for hospitals, and to some extent doctors, is reimbursement from the two big government health programs: Medicare, the federal health program for the elderly, and Medicaid, the state-federal health program for the poor. Changes in these programs, some planned, some de facto, are perhaps the two biggest forces affecting the finances of health care providers in the 1980s.

In 1983, the federal government implemented the Prospective Payment System, a scheme that overhauled the way the government paid for treatment of its beneficiaries. The government injected capitalist incentives into the system and no longer covered what a hospital said were its costs for a given procedure. Most costs were covered by Diagnosis Related Groups, or DRGs, which are specific fees for various procedures. It might reimburse $1,000 for a particular operation. If Hospital A could do the job for $900, it made a profit. If Hospital B spent $1,100 for the same procedure, it lost money.

The topic excites rural hospital administrators, many of whom view prospective payment as a death sentence for their institutions. That is because rural hospitals get reimbursed substantially less than their urban counterparts. The hospital administrators argue that their costs are not much different, a contention generally confirmed by public health officials and the Illinois Hospital Association, an organization whose members include large, urban hospitals as well as small, rural ones.

Medicare problems cannot, of course, be resolved on the state level, although members of the state's Rural Health Task Force want the General Assembly to pass an advisory resolution. Several members of Congress from Illinois have called for eliminating the differential, and U.S. Rep. Robert Michel (R-18, Peoria) has introduced legislation to do so. Michel's bill would eventually eliminate the gap, as would legislation introduced by the Congressional Rural Health Care Coalition, which includes U.S. Reps. Terry L. Bruce (D-19, Olney), Richard J. Durbin (D-20, Springfield), Lynn Martin (R-16, Rockford) and Glenn Poshard (D-22, Carterville).

Michel, minority leader in the U.S. House, has a parochial interest in the issue: The rural hospital that closed in Beardstown was in his district. Another federal legislator with such an interest is U.S. Sen. Paul Simon (D-Makanda, Ill.), who has requested a U.S. General Accounting Office study of the forces affecting rural hospital closings.

Demographics compound the reimbursement problem because Medicare provides a huge share of the income for rural medical providers. The elderly comprise an escalating part of the rural population. As their numbers increase, and with their main source for paying medical bills inadequate compared to what urban doctors and hospitals get —a supposition that few dispute — the pressure on rural providers is intensified.

There is a similar situation with Medicaid and hospitals. The Illinois Department of Public Aid has become notorious in the last two years for late payments to service providers when the state has budget difficulties. Also well-known is Medicaid's low level of payments; it pays far less than the amounts medical providers say it costs to provide services. In rural areas that is compounded by the same kind of demographic trends that affect Medicare: An increasing proportion of poor has made Medicaid the payer for a big share of the patient load in rural areas. "The movers and shakers are moving away, so then we're left with the young, the poor, and the elderly," says Robertson, the medical school administrator.

Robertson's observation has implications beyond the demographics of the patient load. When doctors make decisions on where to practice, location and associated issues are even more important than money, Robertson says. The changing face of rural areas makes it difficult to lure doctors to places where they are already in too short supply.

Doctors tend to marry other professionals, such as lawyers or MBAs. Those professional spouses need jobs commensurate with their interests and skills, and those jobs are difficult to find in rural areas. Young physicians and their professional spouses also want a compatible community, something that can be harder to come by as the exodus of the young continues from rural communities.

Doctors also want, and need, other doctors. Lots of communities put effort into attracting physicians, but the old-fashioned solo practice appears to be just that: a thing of the past. Doctors want colleagues with whom they can discuss cases and who can cover for them when they want time off — things often unavailable in rural areas.

Physicians are not the only ones in short supply in rural areas. The nationwide shortage of nurses is becoming particularly acute, and because of their financial problems, rural hospitals find it harder to pay nurses' salaries competitive with their urban counterparts.

The troubles facing hospitals and the troubles facing doctors serve to compound each other. Hospitals are having an increasingly tough time recruiting physicians to practice in rural areas. Without the doctors, there are fewer patients admitted to the hospitals. With fewer patients admitted to the hospitals, the institutions suffer and eventually close. When hospitals close, it becomes almost impossible to attract physicians to a community because there is no place to hospitalize patients.

Those problems are also linked to the broader economic and demographic trends. Frequently, the hospital is the county's largest employer, making its survival or failure an economic as well as a health-care issue.

Without government intervention, the rural health care environment will undoubtedly continue its haphazard evolution. Everyone agrees this means fewer doctors, fewer hospitals and, ultimately, fewer healthy residents of rural Illinois. Yet many of the people probing the issue say it is possible, although not certain, that a proper harnessing of the forces dictating change in the system could result in improved rural health.

The public health school of thought, a group that includes people from government, academia and their professional associations, is inclined toward visions of new ways of providing

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On the table: requiring health insurance for employees One in eight Illinoisans has no health insurance. Until recently, the problem has mainly been a hospital concern. The Illinois Hospital Association says providing care for those people costs the state's hospitals $550 million to $600 million a year. Hospitals think that is an unfair burden, particularly in an era in which they face competition from doctors' offices and pressure from insurance companies and government health programs to hold down costs. Sen. Howard W. Carroll (D-1, Chicago) calls the widespread lack of health insurance "one of the most important crises facing Illinois." At the association's behest, Carroll and Rep. John Cullerton (D-7, Chicago) have introduced legislation, the Illinois Accessible Health Care Act, to require most employers to offer a minimal package of health benefits for employees. So far, both sides have been playing it by the book: A leak to the press giving a few details of the plan, a news conference to announce the proposal and to try to head off opposition, and visits to communities throughout the state to hold news conferences and convince newspaper editorial boards. Business associations have greeted it as warmly as any proposal for expensive government regulation. The Illinois State Chamber of Commerce, citing the cost to business and predicting lost jobs as employers flee the state or reduce employment, has organized BOMB — Business Opposed to Mandated Benefits. The National Federation of Independent Business, which bills itself as the "guardian of small business" sent out an alert suggesting that "A modern-day Paul Revere should take to the streets warning taxpayers, 'Mandated health insurance is coming! Mandated health insurance is coming!’ As the rhetoric indicates, the proposal is not universally embraced. It would cost money, although just how much and with what ultimate effect on business are subjects of dispute. Specifically, the legislation would require employers with more than five workers to provide coverage that meets state minimums. Employers would pick up 80 percent of the cost for full-time employees and workers would pay the rest. Part-time workers would be responsible for a greater share, depending on the number of hours they work. An employee is defined as someone who works an average of 17.5 hours or more a week and has worked for 90 consecutive days. A plan, the Employers' Health Insurance Purchasing Group, would be established with the goal that it find one or more insurance companies that would provide a package of benefits deemed essential at an estimated annual cost of $1,000 a person. A new employer tax would be established, but employers who provide health plans, either on their own or through the purchasing group, would get offsetting credits. Carroll says enactment of the legislation would provide coverage for 620,000 of the 1.5 million Illinois residents with no insuance and lead to "a healthier society." If people can get care early, he argues, they will not be as sick and so their care would cost less. "What you want them to do is see people before they get really sick," he says. "It's not only less costly, it's more humane." Proponents bill their legislation as pro-business. Cullerton says that the majority of businesses that provide employee health insurance end up absorbing part of the indigent care cost through their insurance premiums. The politically formidable Illinois insurance industry might be seen as a logical beneficiary of such a plan since it might generate business and cut insurers' costs for existing coverage by reducing the amount of uncompensated care that hospitals try to shift to paying customers. But Larry Barry, executive director and general counsel of the Illinois Life Insurance Council, says that is not so: "We're sticking with the rest of the business groups who we sell to. We are opposed to the mandate." Arguing that employers of currently insured workers would save money under the plan does not sway the business community. "We adamantly oppose such government intrusion and costly legislation, which would have its greatest impact on the small firms in our state," chamber President Lester W. Brann Jr. warned his members. Proponents say they welcome suggestions to make the plan less onerous, an invitation so far spurned by the opponents, and proponents insist Illinois will be one of several industrial states to enact a mandatory health plan.             Anthony Man

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health care. Subscribers to that school see new kinds of facilities and medical personnel, with all of it organized on a regional basis. That includes fewer hospitals. But in their place might be rural health clinics providing some emergency services. To leverage the valuable time of physicians — and to get higher reimbursement from the government Medicaid and Medicare programs — the clinics might be organized in special ways and use new kinds of medical personnel, physician's assistants and nurse practitioners.

Such a clinic is envisioned for Cairo, where Southern Medical Center was one of the decade's hospital casualties. As an added inducement, higher reimbursements from the Medicare and Medicaid programs go to practices that meet the federal regulations for Rural Health Clinics. One hitch to establishing those clinics is a requirement for utilization of physician's assistants or nurse practitioners, which are not universally accepted by existing medical professions and are in short supply. Another factor complicating implementation of such visionary rural clinics to serve large geographic areas is the medical transportation system needed to get people to hospitals for emergency treatment.

Ambulances and support personnel are expensive. In rural areas, with relatively low populations, there is not enough demand to keep full-time ambulance services busy. In Homer's representative district, for example, the for-profit ambulance service serving Canton says that it must halt operations because of a $4,000-a-month loss. Unlike the state's larger cities, which can support full-time ambulance services, emergency medical technicians, known as EMTs, and paramedics, most rural areas rely on volunteers. Those volunteers are becoming tougher to find as state and federal training requirements increase.

Better emergency transportation systems and coordination with more exotic services, such as helicopters, could ease the negative effects of fewer hospital emergency rooms across rural Illinois. They might also help turn the presence of fewer, but better hospitals into an advantage for public health. Yet that does not solve the problem facing the growing proportion of elderly residents who are having to travel increasingly long distances for their routine primary care.

The role of public health — traditionally thought of as a government agency performing services ranging from venereal disease clinics to restaurant inspections — is also getting attention. Some parts of the state still have no local health department. Advocates of widespread public health coverage want local departments everywhere and want them expanded, possibly even into providing more direct care for patients.

The public health professionals are also continuing their zealous efforts to put a greater emphasis on prevention. The Department of Public Health holds that relatively small sums of money spent on preventing the diseases that have the greatest health and financial impact on the public — things like heart disease and cancer, which can be controlled to a great extent by diet and not smoking — have a much better payoff than direct investments in treatment. Obstetric care is perhaps the best example. It is unavailable for many pregnant women in rural areas, as doctors have stopped delivering babies because of high malpractice premiums and low medicaid reimbursement. As a result, many pregnant women get little prenatal care at the same time that many rural counties have above-average infant mortality rates.

The emphasis on things like prenatal care and disease prevention means that communities will have a tough time vying for state dollars for bailouts when they face hospital closings or ambulance shutdowns. Planning assistancce is available, but policymakers are reluctant to fund piecemeal assistance when the overall health of the citizenry can be improved more by spending less money on prevention.

All parties call for action to alter the evolution of the rural health system, but the proposals for reshaping the system face formidable obstacles. Established medical providers are threatened by some of the public health school's proposals, many of which require significant changes in attitudes by the existing health-care suppliers. Even the idea of beefing up local health departments is not free of controversy given the possibility that those agencies might experiment with primary treatment, traditionally the province of doctors and hospitals.

The politics is manifested in the very entity charged with generating solutions, the Rural Health Task Force. As with most quandries that call for compromises of politics, power and money, the proposal for changing health system are controversial. That causes either big splits that doom the outcome or a watering down of the plans.

The idea of "birthing centers" is a good case. Proponents concede there are few, if any, areas of Illinois where such centers would be economically viable, but they want the option. The problem with facilities dedicated to childbirth only is that there is no provision to license and regulate them in Illinois.

A general consensus in favor of permitting birthing centers had been achieved by the task force, but the existing providers are edgy about such competition. At the most recent task force meeting, previously accepted ideas were bombarded with objections, centering largely on the competition to existing hospital facilities, problems associated with complicated births and the dubious economics of running a center.

Regardless of whether or not birthing centers per se are a good idea, Robertson says that politics and self-interest may make it impossible to develop meaningful solutions because they "will not be popular. There are no clear winners."

But James Welch, a rural physician, author of the semimonthly "Country Doctor" newspaper column and member of the state rural health panel, sees hopeful signs. "So many of these programs look hopeless, but one change is we get a hearing once in a while. One example is this Rural Health Task Force even has a few rural people — that is a new thing."

One thing is guaranteed. By the end of the 1990s, rural health will look different, marked particularly by fewer hospitals. The unanswered question is whether the replacements born to fill the void will result in a sicker or healthier population.

Anthony Man is Springfield bureau chief for the Lee Enterprises newspapers in Illinois. Research for this article included visits to operating and defunct hospitals, doctors' offices and health clinics, and interviews with patients.

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