Expanding, Not Shrinking, Saves A Small Rural Hospital
Missouri cattle farmer Greg Fleshman became so concerned about keeping his local hospital open that in 2011 he joined its governing board.
"I mean they've saved my dad's life twice," Fleshman says. "He had a heart attack and a stroke and they life-flighted him out of here both times." Keeping the doors open at Putnam County Memorial Hospital in Unionville, Mo., seemed crucial to the community — but maybe an impossible task.
"Things were just falling apart, is really what it was," Fleshman says — "financially, and morale of the employees. And it just seemed to get worse and worse."
Putnam County Memorial was ailing from the same conditions squeezing the finances of many of the nation's rural hospitals. At least 55 have closed since 2010 across the U.S., with another 1 in 10 at risk of going under, by one talley. Only about 5,000 people live in Putnam County, and they tend to be older, poorer, sicker and less insured than the rest of the state.
Health care analysts says Medicare and Medicaid's relatively low reimbursements, combined with dwindling populations in rural regions, are forcing many hospitals like Putnam to operate with tighter profit margins than suburban institutions — and sometimes even at a loss.
Like a lot of institutions, Putnam County Memorial initially looked to cut costs by reducing staff and services. But eventually, as more and more patients went to bigger towns for treatment, the hospital came to the brink.
Fleshman vividly recalls those darkest days: "We had about $8,000 in the bank," he says, and faced a payroll of about $70,000 or $80,000. Two CEOs quit, and the board started calculating what it would cost to close down the facility.
"We didn't think we could get anybody to come in," Fleshman says.
We think that's the way forward for rural hospitals, rather than just sort of a bunker mentality — saying that we can't proceed.
Then a key phone call and strikingly different strategy turned everything around. A doctor in the area called Jerry Cummings, who was then running a medical consulting business with his wife Cindy in central Missouri. Instead of closing its doors, Putnam County Memorial should expand, the couple advised.
The hospital could convert an unused 10-bed unit into a psychiatric wing to bring in new revenue, suggested the Cummings, and offer other medical services that Putnam County residents were driving hours away to get.
The board was convinced, and hired the couple to run the hospital — Cindy Cummings as CEO, and Jerry as COO. The two packed up their home in Jefferson City, Mo., and moved three hours north to Putnam County.
"Immediately, within 30 days, I brought in three other brand new physicians" Jerry Cummings says. He and Cindy brought new specialties to the hospital: anesthesiology, gynecology and cardiology. They also rallied the county to pass a roughly $7 million dollar bond initiative to buy out the hospital's old debt and renovate.
And patients started coming back.
"Our revenues went from $4 million to $22 million — a huge increase," Jerry Cummings says. "Our average daily [patient] census, it was less than 1 patient per day. Our average daily census now is around 11 to 12 patients."
"We think that's the way forward for rural hospitals, rather than just sort of a bunker mentality — saying that we can't proceed," says Tim McBride, a health care economist at Washington University in St. Louis, and one of the study's authors.
In some ways the Putnam County story is unique McBride says. But expanding certain services instead of contracting, might work to save other hospitals, too.
"We believe that rural hospitals often can provide very high quality services," he says.
The community in Unionville had to have that same faith, says Greg Fleshman, that they weren't just throwing good money after bad.
"I think, people had to decide, Fleshman says. " 'Are we going to have a hospital or not?' — and they wanted it here."
This piece comes from Side Effects Public Media, a public radio reporting collaborative that explores the impacts of place, policy and economics on health.
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