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Rural Hospitals Are in Crisis!

You Can Be Part of the Solution 

As of January 1, 2020, the rural hospital closure crisis has claimed 120 facilities across the nation over the past 10 years, according to a recent study released by the Chartis Center for Rural Health. Unfortunately, rural hospital closures are becoming increasingly common with 19 closures in 2019 alone. There are currently 1,844 rural hospitals in the U.S., so the closure of 120 of them over 10 years means we have lost about 7% of them. That’s a substantial hit to the rural healthcare system.

West Virginia’s Hospitals are Closed or are Closing

In West Virginia, the situation is worse, as almost 40% of rural hospitals are at risk of closure, according to the International Business Times. In September 2019, Ohio Valley Medical Center in Wheeling and East Ohio Regional Hospital, just across the river in Martins Ferry, Ohio, both closed. Fairmont Regional Medical Center closed March 19, 2020. And Williamson Memorial Hospital – Mingo County’s only medical center – closed on May 16, 2020.  These hospitals closed principally due to poor financial performance.

Even one of the state’s biggest health care providers, Thomas Health System, which is based in Charleston, is not immune in this crisis. It has sought Chapter 11 bankruptcy protection from its long-term debt. It’s just the latest in a long line of health care providers dealing with rising costs and shrinking budgets in a rural state with a higher percentage of government payers, whose reimbursements do not cover the full cost of treatment. 

Poor Families are Uninsured or Underinsured

A Kaiser Family Foundation report stated that: rural communities tend to have a disproportionate number of poor, uninsured or underinsured patients. “Some of these challenges—such as low patient volume and a heavy reliance on public payer programs—have persisted for many years,” the report found.

In West Virginia, 1.1 million people are covered by public insurance policies such as Medicaid, Medicare and the Public Employees Insurance Agency, known as PEIA. All of those plans reimburse health care providers only 32 cents for every dollar of care. Hospitals that are predominantly taking care of government-insured or poor patients tend to struggle.

Hospitals are in Crisis

Even large community hospitals are in jeopardy. “Back in 2008, you could see what our percentage of commercial payers were,” stated Dan Lauffer, of Thomas Health Systems, in a recent television interview. “It was as much as 28 to 30%…(but) here we are in 2020 – looking at 16 to 18%.” That’s a huge difference in terms of revenues.

Data provided by the West Virginia Department of Health and Human Resources (WVDHHR) indicates that about 500,000 state residents have Medicaid for their insurance. Another 400,000 are on the Medicare rolls, while 200,000 are covered by PEIA. “When those payers represent the bulk of your payments and those payments don’t cover costs, it becomes a real problem,” stated Bill Crouch, WVDHHR Cabinet Secretary.

The Survival of Hospitals is Tied to Private Industry

The U.S. Census Bureau estimates that West Virginia’s population is only 1,792,000 people, but 1.1 million of them are covered by public policies. Meanwhile, 692,000 are, in most cases, covered by insurance plans which reimburse at a higher rate for hospital services.

Building and Construction Trades is a Major Industry

 So, it seems that the survival of our rural hospitals is directly tied to private industry and the insurance coverage these industries provide to their employees. One major industry offering such coverage is the building and construction trades. More than 20,000 West Virginians and their families are covered under health insurance programs supported by this vital industry. These private health plans currently pay millions of dollars annually into the WV health care system.

Unfortunately, the building and construction trades, along with many associated privately insured businesses, are facing their own challenge. And the insurance coverage they provide to their West Virginia employees is in jeopardy.

Prevailing wage made it possible for businesses that provide health insurance to compete with fly-by-night, out-of-state companies that often don’t provide any healthcare coverage for their employees.

A Prevailing Wage Provides a Fair Wage

In brief, a Prevailing Wage Law guarantees that workers are paid a fair wage, based on a regional survey of rates for their particular level of skill and experience. Ultimately, prevailing wage delivers more value to taxpayers and limits those fly-by-night, out-of-state companies from gaming the competitive bidding process on tax-funded public works projects. It ensures that only reputable companies benefit from our tax dollars. These are companies that employ local workers and privately support healthcare plans for their employees and our local hospitals.

We can help save our local hospitals if we support the restoration of West Virginia’s Prevailing Wage Law. The repeal of prevailing wage has deeply hurt our working families and the promised tax savings the repealers promised never came about. Won’t you lend your voice to the thousands of Mountaineers calling for the restoration of this law that is so critical to our economic growth and the future of our local hospitals? It’s easy to do by signing our petition. Please get on board and help us to restore prevailing wage to Restore West Virginia!