Even as the nation moves haltingly toward implementation of a national health care system, the federal government last week proposed a major whack at rural health care services -- a move that could eventually shutter as many as 42 smaller rural hospitals here in Wisconsin.
The Office of Inspector General of the Department of Health and Human Services last week recommended removing the "critical access" designation of two-thirds of the nation's 1,328 critical access hospitals in an effort to save more than $1.1 billion per year.
The smaller critical access hospitals that have a maximum of 25 beds and generally serve more rural areas receive 101 percent reimbursement from Medicare, a rate much higher than that of other hospitals.
To get the "critical access" designation, a hospital must be more than 35 miles from another hospital or 15 miles away on mountainous or secondary roads. The inspector general's recommendation would enforce that designation and eliminate the special payments for 846 hospitals nationwide -- including at least 42 in Wisconsin.
Many of those hospitals were grandfathered in when Congress tightened the special exemption status in 2006.
For rural hospitals, the loss of critical access designation could mean a reimbursement cut of $860,000, plus another $485,000 that patients would pay in higher out-of-pocket costs.
In small towns and cities across the state, the recommendations are being viewed with alarm. In some instances they are significant employers.
"This is not only a frontal attack on rural health, it's a frontal attack on the rural economy," said Tim Size, executive director of Rural Wisconsin Health Co-operative, which represents half of the state's 58 critical access hospitals.
"We're going to lose a lot of rural hospitals and we're going to leave a lot of others walking wounded," Size said.
U.S. Sen. Tammy Baldwin, D-Wis., has taken up cause and says the cuts would diminish health care opportunities in rural areas of the state.
"If enacted, these policies would compromise access to health care and weaken rural economies in Wisconsin and across the country," she said. "I fear that these proposals could even force many rural Wisconsin hospitals to shut their doors -- causing a ripple effect on our economy and leaving many without access to care."
Baldwin and 19 other senators are urging the Senate Finance Committee to block the agency's proposed changes.
Rural hospitals had already been targeted in the Obama administration's 2014 budget proposal, which called for elimination of critical access status for those hospitals within 10 miles of another hospital. That change would still have eliminated the special payment status for eight Wisconsin hospitals.
Those cuts, in our view, would still pose difficulties for rural residents to access good health care, but they would be far preferable to the meat-ax approach urged by the DHSS inspector general.