Prognosis grim for rural hospitals

Janice Beaudin-Johnson is a regular at Nye Regional Medical Center. She checks into the Tonopah hospital often enough that nurses affectionately tease the mother of two about naming a gurney after her. When she wakes up at home feeling dizzy and out of sorts, as happened one morning last week, Beaudin-Johnson knows where to go.

Just as she knows where she'll go -- sadly, but without hesitating -- if the financially hobbled center closes.

"This place has literally saved my life many times," Beaudin-Johnson, who suffers from diabetes, multiple sclerosis and occasional seizures, said as she reclined in a hospital bed. "If it goes down, I have to leave."

It's no wonder why. The next nearest facility, Mount Grant General Hospital, may as well belong to another solar system, situated as it is 103 miles to the north in Hawthorne.

"I want to raise my kids here in Tonopah," said Beaudin-Johnson, 38, who moved to town from Arkansas with her husband in 1988. "But you can't stay without a hospital."

If the regional center were a patient, it would be wheezing away on life support. The hospital is hemorrhaging $100,000 to $150,000 a month, and only the Nye County Commission's approval of a $350,000 loan to the facility earlier this month prevented its doors from shutting. As hospital and county officials scrounge for funds and solutions to resuscitate the center, the prognosis for its survival beyond February appears grim.

The center's woes represent merely the most grave crisis among Nevada's small medical facilities. Six of the state's 10 rural hospitals ended fiscal year 1997-98 in the hole, with Nye Regional digging the deepest one-year deficit at more than $700,000.

A miasma of problems has enveloped rural hospitals in the last two decades. The soaring costs of malpractice insurance and medical equipment, the difficulty of recruiting, hiring and retaining doctors, reductions in Medicare reimbursement, managed care, dwindling residential populations -- all have left small facilities floundering.

"It's getting harder and harder to keep your head above water," said Richard Munger, longtime administrator of Mount Grant hospital, which took a $79,000 hit last fiscal year. "Medicare and Medicaid, the insurance companies -- trying to control all of that, it's so complicated and tedious. It's a shame."

The stakes spike higher in Tonopah, where the hospital's demise could induce an exodus of residents as well as economic prospects. The theory goes that few families, and fewer businesses, will want to set down roots in a town located a 90-minute drive from the closest full-service hospital.

Compounding matters is the steady stream of traffic along Highway 95. Every day 8,000 to 15,000 vehicles pass through Tonopah, home of the sole hospital between Hawthorne and Las Vegas -- a lonesome stretch of more than 300 miles.

Should the facility close -- thereby severely reducing ambulance service to the area -- motorists better have their wills written up before climbing behind the wheel, cautioned Bill Welch, president of the Nevada Rural Hospital Project, a coalition of the state's small medical facilities.

"If you have an accident outside of Tonopah and you have to drive to Hawthorne, guess what? You're not going to make it," he said.

No one needs to tell that to Theresa Skiles, a registered nurse at Nye Regional since 1989. Of all the broken bodies she has seen sewn back together over the years, the mending of one patient alone affirmed the hospital's worth for her.

Three weeks ago during a snowstorm, a car driven by Skiles' 18-year-old daughter skidded into a semi-truck that had pulled to the side of the highway near Goldfield, 25 miles south of Tonopah. The collision left the teenager with a perforated bladder, an injury that without immediate medical attention could have proved fatal.

"There have been so many times that we saved lives like that," Skiles said. "Call us small, dinky, rural or whatever. We've done great things. There's a need for hospitals like us."

A need, yes. A sure-fire way to stay solvent, no.

Although nobody wishes for the plague to make a comeback, an epidemic sweeping across Nevada would help put bodies in rural hospital beds. As is true with too many other endeavors in rural areas, small medical facilities want for customers.

Take South Lyon Medical Center in Yerington. The facility, an hour's drive from hospitals in Fallon and Carson City, is within proximity of 10,000 people. Yet most days 12 of its 14 acute-care beds for short-term patients sit unused.

Federal and state regulations require that hospitals have a doctor and nurse on duty around the clock to maintain full-care status. Combine that cost with the slow flow of acute-care patients and it's little surprise that South Lyon sank $227,000 into the red last fiscal year.

"The staff has to be there at the hospital or on call whether you have patients or not," hospital administrator Joan Hall said. "You have the expense without the offsetting revenue."

Seven of the state's 10 small hospitals boost their bottom line by providing extended-care beds for long-term patients. While most extended-care patients are covered by Medicare, which pays only a nominal portion of total costs to hospitals, they at least supply a rural facility with reliable revenue -- and a chance to claw its way into the black.

"Extended care is our bread and butter," Hall said. An increase in demand prompted South Lyon to add 19 long-term beds a year ago, bringing its total to 49. "That's what keeps rural hospitals going."

At the same time, Medicare remains something of a dirty word to small medical facilities. The push to balance the federal budget in 1997 led to further reductions in reimbursement for Medicare patients, opening a deep financial wound in rural hospitals.

Medicare recipients make up half of the patient base in Nevada's rural medical centers, and close to two-thirds at Pershing General Hospital in Lovelock. In a typical disparity, the facility charges $120 for a lab procedure such as an X-ray; Medicare hands back $15. Pershing's shortfall last year was $190,000.

"You never get ahead," said Russell Cox, the hospital's director of administrative support services. "In the end you operate at a loss, so instead of setting money aside you have to put it back into the current operation. You're stuck."

Nor does it help that under federal and state law, hospitals must accept any patient who comes to the emergency room -- whether the person can pay or not. More so than their urban counterparts, rural workers live without the net of health insurance, relying instead on emergency rooms to catch them when they fall, Hall said.

"People soon realize that they might not be let into the doctors' clinic, but the ER can't turn you away. They may have money, but they might only make enough to feed the kids and pay their other bills. So they go to the ER," she said.

Meanwhile, as revenue from Medicare and the emergency room atrophies, the cost of hiring doctors and obtaining equipment continues to bloat.

Nevada's rural hospitals will drop between $30,000 and $50,000 combing the country for a general practitioner, internist or pediatrician, dangling an annual salary of $130,000 to $150,000. Hospitals in Reno and Las Vegas, by contrast, pay $90,000 to $120,000 for the same jobs, Welch said.

The high price of recruiting reflects the no-stone-unturned approach that small hospitals must undertake to land even one physician. And the fatter rural salary reveals a few hard truths about small-town medicine:

* Not many doctors want to live in the sticks.

* Increased specialization in health care makes a physician who can handle everything from sore throats to heart attacks a rare find.

* The work at a small facility is beyond full-time -- it's all the time. That's why most rural doctors move on after fewer than five years.

Pershing General finally nabbed two staff doctors last fall, ending a three-year drought during which the hospital depended on family practitioners and specialists to parachute in as needed.

The presence of the new physicians has re-inflated the confidence of patients as well as, to an extent, the hospital's revenues. The facility now receives one to three acute-care patients every day, a virtual stampede compared to the two to four patients a month it saw previously.

"People want to go to the same doctor when they come to the hospital," Cox said. "That's human nature. When you don't have that stability, they go somewhere else."

The same pattern holds when patients walk into a rural facility and find out they can get a CAT scan -- just as soon as they drive to a city clinic.

For small hospitals, such presumed medical necessities remain unaffordable luxuries. A new CAT scanner, for example, goes for about $250,000, plus carries a yearly maintenance tab of $40,000. Tack on the $40,000 salary of the technician needed to operate it, and hospital officials quickly snap their wallets shut.

The Nevada Rural Hospital Project picks up the slack a bit by helping small facilities split the cost and use of lab equipment. The group has bought a mobile CAT scanner and an MRI machine that hospitals share on a rotational basis.

Still, the absence of permanent equipment, coupled with rising malpractice insurance costs for surgery and obstetrics, have hurt rural hospitals. A family practitioner's annual malpractice premium generally runs to $10,000; practicing obstetrics more than triples the amount.

The math doesn't add up for a Mount Grant doctor, working in sparsely populated Mineral County, who would handle at most 60 to 70 births a year, Munger said.

"That's nowhere near enough newborns to cover your insurance," he said. "It doesn't make sense economically."

Burdened by doctors' ever-escalating premiums and lacking essential equipment, most small hospitals send pregnant women and patients in need of surgery to urban facilities, except in emergencies. Turning that business away is painful, but increasingly the best advice rural doctors can offer patients is to take two pills and call UMC in the morning.

"You have to refer patients to bigger hospitals," Hall said. "That's just what you do."

A lack of confidence

Sheila Palacios is four months pregnant. Or maybe five. She's not sure -- Nye Regional lacks comprehensive obstetrics care, so Palacios, 31, won't know until she makes the three-hour drive from Tonopah to a Las Vegas hospital for an ultrasound.

"It's a big hassle," said Palacios, who has two daughters, ages 4 and 1. "The last time I gave birth I had to go down (to Las Vegas) three days early. I'd like to do it here, but there's no way.

There's no way because of Nye Regional's limited resources, and because Palacios, like most patients, wants continuity of care -- one doctor to guide her through from prenatal to postnatal care. Nonetheless, Palacios, a waitress at the Sundowner Restaurant, hopes the hospital stays alive.

"It's a Catch-22," she said. "You want to use (the hospital), but they don't provide the facilities you need because they don't have the money."

The struggles of rural hospitals, from physician turnover to patient migration, are no more evident than in Tonopah. The Department of Taxation declared a state of financial emergency for the facility two years ago, after it plunged $670,000 into debt. Sometime later the center's two staff doctors departed, forcing the hospital to get by with what Welch called "rent-a-docs" until a couple of permanent replacements were hired six months ago.

The carousel of doctors damaged faith in Nye Regional as much as anything else, and recovery has been glacially slow in coming, even with full-time doctors now on board. Welch, who has provided administrative support to the facility, estimated that 60 percent of the town's 3,300 residents still travel elsewhere for their health care.

Nye Regional interim administrator David Bezard added: "People lack confidence in the sense that they're not sure if these doctors will be here for an extended period of time or that the hospital will be here for an extended period of time. They don't want to trust their health care to something that might not be there in the near future."

While 24 of its 32 long-term beds were occupied last week, the hospital averages only two to four acute-care patients a day. The center's outpatient clinic receives 20 to 22 patients daily but would need 35 to alleviate the hospital's financial crunch.

Welch regards the low usage as somewhat puzzling, given how dozens, sometimes hundreds, of people rally behind the hospital at county commission meetings and other public hearings.

"(The center) could easily handle doubling its volume. That would eliminate the negative cash flow," Welch said. "But if people don't support the hospital by using it, there's nothing we can do to fix it. We might be able to avoid an emergency situation if they start using it."

And sooner rather than later. The hospital lost $886,000 during the second half of 1998, amassing $753,000 in cash flow deficit. The numbers stir serious doubts about how much longer residents and motorists will have Nye Regional to count on in emergencies. Or at all.

"It's petrifying, actually," Mark Tisue said. He should know. A highway worker with the Nevada Department of Transportation, Tisue, 30, has rushed more accident victims to Nye Regional than he cares to remember. "A lot of people could lose their lives without this hospital."

"People are scared," added Donna McGaw, Nye Regional's director of nursing.

"The potential for this hospital closing is real. When you're losing $100,000 or $150,000 a month, the potential is very real."

The hospital's travails also provoke speculation over what impact its demise would have on Tonopah's economic fortunes.

The disappearance of the area's sole medical provider, Welch said, could both deter new businesses from moving in and drive existing companies out, with residents close on their heels.

Those likely to depart would include some of the 60 workers at the hospital, one of the town's largest employers. Becky Tisue, Mark's wife and a registered nurse at the center, admitted that she has dusted off her resume just in case. Even so, she's thinking less about her career than available health care for the couple's 5-year-old son, Jerett.

"I'm worried about having a job. But we're more concerned about him (Jerett)," Becky Tisue said. "We don't want to have to drive an hour if something happens to him. That's too far in an emergency."

Last, best hopes

The hospital death watch notwithstanding, two last-ditch efforts could keep Nye Regional from going flat-line.

State Assemblyman Roy Neighbors, D-Tonopah, has introduced emergency legislation that would enable county hospital districts to continue collecting taxes to pay off operating debt even if a medical facility closes. Current state law allows hospital districts to cover only bond debt.

The initiative could prod county officials to allocate more funding for the hospital since, in the event of its death, Nye still would recoup the money. Perhaps as crucial, the legislation may dissuade vendors -- knowing they would get paid one way or another -- from bailing on the hospital. The center's financial tribulations have delayed payment to vendors, who effectively could kill the hospital if they halted shipment of supplies, Neighbors said.

County Commissioner Bob Davis, who doubles as chairman of Nye's hospital board, said passage of the legislation could encourage the commission to extend monthly loans until the hospital rights itself.

"If we could say Nye Regional was going to be open for a year, that would help rebuild the confidence in the community and hospital usage would go up -- hopefully," he said.

Nye Regional also may find salvation at the federal level. The state has applied for admission to the Critical Access Hospitals program run by the Health Care Financing Administration. Born of the same 1997 Medicare reform package that has pinched rural facilities, the critical-access program would help Nevada's small hospitals trim costs and up revenues.

The critical-access designation gives rural facilities the leeway to staff emergency rooms with mid-level practitioners, including nurses and physician assistants. That is a far less expensive option than posting a doctor in the ER 24 hours a day, although one would remain on call. The change could drop the overhead of hospitals such as Nye Regional by as much as $300,000, according to a Nevada Rural Health Project preliminary analysis.

The program also improves a rural hospital's Medicare reimbursement rates by basing payment on the cost of services rather than a set percentage, as happens now. The switch could hike a facility's reimbursement rate by an estimated 12 percent to 14 percent, Welch said.

Nye Regional, Pershing General and Grover C. Dils Medical Center in Caliente, which lost $122,000 during the 1997-98 fiscal year, would receive critical-access eligibility if Nevada is accepted into the program, Welch said. South Lyon and Mount Grant also could make the cut.

But securing critical-access status is hardly a sure thing. Aside from meeting the program's assorted criteria, Nye Regional would need to obtain a federal waiver to qualify because, by a statistical anomaly, Tonopah is considered part of the Las Vegas metropolitan area.

And the designation should not be regarded as a panacea for Nye Regional, said Caroline Ford, director of the Office of Rural Health and an assistant dean at the University of Nevada School of Medicine.

"(Critical access) will be a definite and significant help, but it's not going to save the Tonopah facility. A large part of what needs to happen is the community using the hospital, especially people with health insurance and other means of paying for their health care," Ford said.

Moreover, the earliest the center could earn the designation is September. Sustaining the hospital until then would require as much as $1.5 million in public dollars, and there's no guarantee that the county commission would approve the funding.

Commissioner Cameron McRae, the only member of the five-person board to vote against the $350,000 hospital loan at its Feb. 2 meeting, noted that day how the county already has pumped millions of dollars into the facility over the last decade. He warned that propping up the hospital much longer could wipe out county reserves.

If the critical-access plan falters, Nye Regional may be put up for sale, and one private buyer already has shown interest. Whether in public or private hands, however, the institution has a dime-thin margin of error.

Should the center close for even one day, it would need to reapply for certification under fire, safety and numerous other county and state codes. The high cost of upgrading the building and its facilities almost certainly would convince all parties to let the hospital perish, good intentions aside.

Nye Regional's murky future has its extended-care patients, many of whose next of kin live hours away, wondering where they will go if the worst happens. Frances Proe, 88, moved into the facility three years ago and considers the other patients her family. Talk of the hospital's fate echoes in the hallways, and for Proe, sleep is hard to come by these days.

"It's the only place I have," she said. "It's like breaking up your home. I don't know what I'll do."

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