The number of Colorado hospitals at risk of closing is in the double digits. That's based on an analysis from the Center for Healthcare Quality and Payment Reform.
Ten hospitals, nearly a quarter of the state's 43 total rural inpatient hospitals, are at risk of closing. Three are at immediate risk of closing in the next two to three years.
Eighteen hospitals, or 42 percent, are operating with losses on services.
The report doesn't name the facilities.
Rural hospitals often lose money delivering care, don't earn enough revenue from other sources to offset losses and have low financial reserves, according to the report.
“We've got 21 rural hospitals operating in the red right now,” said Michelle Mills, CEO of the Colorado Rural Health Center.
Over the past two decades, nearly 200 rural hospitals in the U.S. have closed, but none in Colorado, the analysis reports.
The group studies federal fiscal year data every quarter, examining a hospital’s average three-years margins. The data comes from CMS. That’s the federal agency that provides health coverage to more than 160 million people through Medicare, Medicaid, the Children’s Health Insurance Program and the Health Insurance Marketplace.
The impact of a hospital closing would be devastating
Mills said the closure of any hospital would be devastating to the immediate community, as health care tends to be one of the top three employers in a rural town and is a strong economic driver.
“Typically what happens if a rural hospital closes, then many other businesses go away too, and it's very difficult to attract new businesses to the community,” she said.
Most run and operate rural health clinics as well. “So if the hospital closes, you also lose primary care also,” she said.
It also forces nearby residents of the community to travel a long distance for emergency or inpatient care.
Uncertainty now caused by possible Medicaid cuts
Republicans in the U.S. Congress want to sharply cut taxes. In a proposed budget blueprint they’ve spelled out deep spending cuts. They’re also weighing up to $4.5 trillion in tax cuts. Medicaid is one key federal program that potentially faces serious cutbacks.
An $880 billion-a-year state-federal program, Medicaid is foundational to America’s entire health care system, since it provides health coverage to millions. The list of people covered includes seniors, those with disabilities, low-income Americans, pregnant women, adults and children.
Health First Colorado is Colorado’s Medicaid program. About 1.2 million people, roughly a quarter of the state’s population, need it for services ranging from doctor checkups to preventative care to ER visits, according to the latest data from the agency.
Mills warned that deep Medicaid cuts would be sorely felt in rural Colorado, where nearly 35 percent of residents are covered by Medicaid or CHP+, the public low-cost health insurance program for certain children and pregnant women.
“I'll just say in general, that Medicaid funding is pretty critical to the rural infrastructure. All health care entities there rely on Medicaid,” she said. If cuts go through, “we have the potential for rural facilities to close, in particular rural hospitals to close.”
In some Colorado counties, as many as around half the residents are enrolled in the program.
“So for example, we've got 53 percent in Costilla County that rely on Medicaid funding. So imagine if 53 of the people that are receiving health care that live there all of a sudden have no health care, I mean, that's catastrophic, right?” Mills said.
Medicaid patients would stop seeking services because they can't afford them without having any type of insurance, she said. That includes people who have chronic diseases, things like diabetes, that have to be regularly managed. Without that coverage, they would go without care, and end up in the emergency room with “massive amounts of bills that they will not be able to pay.”
Hospitals would then be saddled with plenty of uncompensated care because the patients can't pay. “So the hospital will absorb the cost,” Mills said. “If the hospital's operating in the red, that further declines their ability to serve in the community.”
The view from the state’s hospital association
The Colorado Hospital Association released a statement acknowledging the challenges that facilities have been facing.
“More than 70 percent of our hospitals operate with unsustainable finances after multiple years of increasing supply costs, regulatory requirements, and increasing administrative and reimbursement challenges,” said Cara Welch, its senior director of communications, in an email.
“And unfortunately, after more than 40 years without a hospital closure in our state – defying the trends that led to closures that were prevalent in other states across the country – we now have two behavioral health facilities that have announced their closure and other hospitals planning service reductions.”
She said though the group could not confirm the methodology of this report and their specific number, it certainly is “in line with the trends we have been seeing from our hospitals. However, Colorado hospitals have worked incredibly hard to avoid unnecessary closure or reductions in an effort to keep hospital services in communities across the state.”
