WMKY

Rural Hospitals Turn to Affiliation to Keep Doors Open

Jun 21, 2016
Originally published on June 22, 2016 1:20 pm

At the emergency room at Preston Memorial Hospital, nurses are wheeling 47-year-old John Shaffer to an imaging room. He’s been having chest pains and trouble breathing.

“I went to my family doctor first and they did an EKG and then I came here,” he said. The distance between his doctor’s office and the hospital is about ten miles. The next closest hospital is close to an hour away – a distance not unheard of in rural Appalachia.

Recent research shows almost a third of Appalachia’s rural hospitals are vulnerable to closure, though.

Despite their history of independence, many of them are beginning to affiliate with larger systems, in an effort to keep their doors open.

One such example is Shaffer’s hospital.

Preston Memorial

Preston Memorial opened a new facility last year, replacing a building almost 60 years old.

“We really knew if we wanted to keep healthcare in Preston County we needed modern facilities,” said Melissa Lockwood, CEO of Preston Memorial.

“At that time the cost of that was very prohibitive for us on our own,” said Lockwood.

Preston was able to raise about 27 million dollars for the hospital. But that still left them 10 to 15 million short of what they needed. Bottom line? It was no longer possible for them to make it on their own.

They knew they were going to have to find a partner – an affiliate.

Affiliate or Close?

“There’s a number of reasons hospitals choose to affiliate,” said Michael Topchik – senior vice president of the health research company iVantage Health Analytics.

Topchik said Preston is not alone. Small, rural hospitals across Appalachia are exploring affiliation options as it gets harder for them to survive on their own.

“So from a rural hospital’s perspective, in order to maintain its independence, it might seem ironic that they would choose to affiliate,” said Topchik. “But that might be precisely the path to allowing them to provide high quality care close to home for the rural citizens in their community.”

Preston Memorial chose to affiliate with Mon General – a large community hospital based in Morgantown. Mon General served as financial backer for the loan on Preston’s new building. Preston also refers patients with complicated conditions there.

Because Preston chose affiliation when it was doing well financially, it had the bargaining power to keep leadership local. It even gained membership on Mon General’s board.

Barriers to Affiliation

But Topchik says some hospitals resist affiliation.

“Rural America is fiercely independent and it wouldn’t surprise you then to find boards and leadership teams who have grown up in towns, have had children in these hospitals, who have had loved ones pass away in these hospitals, fiercely defend this independence,” he said.

But if they wait too long and begin to flounder financially, he says their eventual affiliation may be more like consolidation, where a bigger system buys up a little one.

That opens the door to possible negative consequences, including higher prices, lower patient satisfaction, and decreased hospital quality.

“I know it’s hard to understand,” said Preston, the CEO of Lockwood, in explaining that small hospitals are in a tough position – “but you are kind of just always teetering on the brink of the cliff.”

Research Links Affiliation with Stability

In February, iVantage published new research on rural hospital vulnerability. It showed a third of rural hospitals in Appalachia are vulnerable to closure.

To date, about half of rural hospitals in Appalachia have affiliated with larger systems. Several others are considering it, although none would speak on the record until contracts were finalized.

For Preston Memorial patient John Shaffer, as long as he has somewhere to go when he is in pain, affiliation or independence makes little difference.  

“They’ve got the same doctors, same staff – everything’s about the same, you know what I’m saying?” he said.

Except that without affiliation, Preston Memorial says it would eventually have had to close its doors.

Appalachia Health News is a project of West Virginia Public Broadcasting, with support from the Benedum Foundation.

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