Mon., January 16, 2012 2:00pm (EST)

Economy Hurting Rural Hospitals
By Joshua Stewart
Updated: 3 years ago

ATLANTA  —  
Nearly half of the state’s rural hospitals are operating in the red, according to the latest hospital financial survey by the state Department of Community Health. A quarter of urban hospitals reported a similar situation. (Photo Courtesy of David Liban via Flickr.)
Nearly half of the state’s rural hospitals are operating in the red, according to the latest hospital financial survey by the state Department of Community Health. A quarter of urban hospitals reported a similar situation. (Photo Courtesy of David Liban via Flickr.)
Hospitals in Georgia are suffering under the weight of the sluggish economy, and the financial strain is especially heavy for smaller, rural medical centers.

Nearly half of the state’s rural hospitals are operating in the red, according to the latest hospital financial survey by the state Department of Community Health. Accounting just for the costs of patient care and no other revenue streams, it’s even worse: 73 percent have negative operating margins.

Hospitals point to more people without jobs and without employer-sponsored health insurance.

“They still have health care needs and they end up in the hospital emergency room, and hospitals in many cases are forced to absorb those costs treating those patients who need that care,” said Kevin Bloye with the Georgia Hospitals Association. “It really is creating a huge financial burden in those small communities when you only have a small percentage of those patients who actually have commercial health care insurance.”

Bloye said medical centers are also seeing more underinsured and Medicaid patients.

He said all of the state’s hospitals are feeling this pressure -- a quarter of urban hospitals reported running a deficit in the state survey -- but it is worse in rural areas because those facilities are smaller and have smaller cash reserves.

Even some patients who do have health coverage are struggling.

“If you have a $1,000 deductible but you have health care insurance, people are having a hard time paying those deductibles or those co-pays,” Bloye said. “Hospitals are oftentimes left holding the bag with those as well.”

Bloye said hospitals typically receive only 10 percent of the charges they bill to uninsured patients.