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Rural Hospitals Face Tough Financial Times Under The Coronavirus Strain

By Erin Ross (OPB)
April 8, 2020 1:15 a.m.

Oregon’s hospitals need help. That’s the message lawmakers and health care officials are sending to Oregon Gov. Kate Brown.

In an effort to preserve personal protective equipment for doctors and limit the spread of the new coronavirus, elective surgeries and medical procedures have been canceled across the state. Those elective procedures make up a majority of most hospitals’ income.


Members of the Oregon Association of Hospitals and Health Systems addressed a letter to the governor that outlined the financial pressures hospitals are currently up against. The letter, which was also sent to state legislators, called the new coronavirus pandemic an "unprecedented challenge."

“They are preparing for and responding to the COVID-19 pandemic with limited personal protective equipment and liability protections – a recipe for an anxious and fearful health care workforce,” the letter states. And while hospitals are spending money preparing for the COVID-19 pandemic, they’re also losing income.

“Hospitals’ finances have deteriorated dramatically as a direct result of actions taken to protect our communities,” the letter says.

Those actions include canceling elective procedures and encouraging people to avoid emergency department visits. Becky Hultberg, the CEO of the Oregon Association of Hospitals & Health Systems and an author of the letter, told OPB the state was right to cancel those procedures. But as a result, many hospitals have seen revenues drop by an average of 40% to 60%. And responding to COVID-19 is only getting more expensive.

“This is especially problematic in some of our smaller communities, where they may not have even one patient in the hospital, and their revenue has dropped by 50%,” Hultberg said. “And in some cases, we have facilities that are actually contemplating laying people off.” And layoffs are the last thing hospitals want in the face of a pandemic.

Hultberg said small hospitals are the metaphorical canary in the coal mine. Because they don't have financial cushions as large some urban hospitals', they're going to feel financial impacts first. But that doesn't mean that urban hospitals are immune. Across the country, urban hospitals are taking cost-saving measures, like asking doctors to work without pay.

Some state and federal aid has reached Oregon’s hospitals.

The Oregon Health Authority has released the remaining $1.8 million in funds from the Rural Health Initiative, Hultberg wrote in the letter, adding, “This will give each of the 33 small and rural hospitals approximately $56,000. While every bit of support helps, the dollar amounts are small compared to the need.”

Congress recently passed the CARES Act, which includes funding for hospitals. But Hultberg says it’s unclear how and when those funds will be distributed, and hospitals need funds now.

The letter asks the governor to immediately create a $200,000,000 COVID-19 stabilization fund to “address initial urgent needs of hospitals so they can continue providing service.”

The association is also asking for a portion of those funds to be reserved for rural hospitals.

Some small hospitals are doing better than others. The Good Shepherd Healthcare System in Hermiston, Oregon, is a critical access hospital with 25 beds. The hospital's president and CEO, Dennis Burke, says its revenue has dropped by about one-third during the outbreak.


Charlie Tveit is chair of the association’s Small and Rural Hospital Committee and among those to sign the letter to Brown. He’s also the CEO of The Lake Health District. It’s one of those small, rural care networks struggling to make it financially.

Lake County is one of the largest counties by area in Oregon. The nearest metropolitan area is Klamath Falls, over 100 miles away.

Lake County Health's main hospital serves the county’s roughly 8,000 residents, as well as about 7,000 people from neighboring communities, including some in California and Nevada. It also has a few smaller clinics spread throughout the area and is the largest employer in Lake County.

Tveit says the hospital is about as prepared for coronavirus as it can be. But it couldn’t prepare for the massive drop in revenue that the cancellation of those elective procedures would cause.

“Elective procedures make up the majority of our income,” Tveit said. “We’re a long distance away from other hospitals. It’s hard to travel for elective procedures. Insurance will cover hospital bills, but not hotel stays.”

“We’ve lost, oh, well over 50%, 60% of our normal revenue,” Tveit said, “We’re one of the lucky ones.”

Lake Health District is still collecting money from procedures done in February. But by next month, that money will be gone, and Tveit says he will need to consider reducing staff hours.

If help doesn’t come from the state and federal government soon, Tveit said his system may be facing layoffs. He’s heard of other rural hospitals that already are.

Small, rural hospitals face unique challenges in this pandemic. They don’t have the capacity to treat patients who need multiple days in an intensive care unit. They have what they need to stabilize patients until they can go home, or transfer to another hospital with available beds. But sometimes those hospitals are full, and sometimes inclement weather means that aerial patient transports can’t take off or land. Tveit says the Lake District Hospital sends patients as far away as Reno during especially busy seasons.

So far, there are no confirmed cases of COVID-19 in Lake County, and 17 people are waiting for test results. Tveit is worried about what will happen if the hospitals he usually sends patients to are full due to COVID-19.

“We also worry that one of those referral facilities will not be capable of taking patients. Our physicians prepare for that, and people in the community understand that it may be a possibility,” says Tveit, “We’re very fortunate that our physicians are a part of and care for their community. It means they’re able to do more.”

He’s also worried about layoffs: his hospital has so few employees, they can’t afford to lose any.

Right now, his employees are doing their best with the time that they have. They’re treating potential COVID-19 cases in the hospital or in the patients’ homes. As much as possible, they try to follow up in person or over the phone with potential cases.

“We’re making lists and going down the line and calling them,” says Tveit, “But telehealth is a challenge here. Not everybody has a smartphone, and not everyone has internet.”

Instead, some of the doctors are making house calls, “We have doctors and nurses waiting for patients to come in with coronavirus. But right now, they’re looking for work to do. So we’re saying reach out, check in on people.”

Tveit says this isn’t just hurting hospitals: it’s also hurting doctors, nurses and physicians who practice in those hospitals but may not be on the payroll.

Most of those physicians are self-employed, Tveit explains, “It really hurts you, if you’re a surgeon but you can’t do surgeries anywhere. We have a little cushion, but those private doctors have it even harder.”