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.
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.
One of the first moves Jerry Cummings made, after becoming Putnam County Memorial's COO in 2012, was to hire more doctors and renovate an unused unit to become a psychiatric wing.
"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."
And, according to a report published by the health panel of the Rural Policy Research Institute last November; more cash-strapped rural hospitals could thrive by taking the same tack.
"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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Transcript
STEVE INSKEEP, HOST:
Rural hospitals are in crisis. Fifty-three have closed in the last few years, and more are in danger of closing.
RENEE MONTAGNE, HOST:
Many that survive have tried to save money by cutting services, and then there's the Missouri hospital that rescued itself by doing the opposite. Bram Sable -Smith reports from our member station KBIA.
BRAM SABLE-SMITH, BYLINE: Cattle farmer Greg Fleshman became so concerned about keeping the local hospital opened that he joined its board in 2011.
GREG FLESHMAN: I mean, they've saved my dad's life twice. He had a heart attack and a stroke, and they've flied him out here both times.
SABLE-SMITH: But keeping Putnam County Memorial Hospital in Unionville, Mo., opened seemed an impossible task.
FLESHMAN: Things was just falling apart. That was really what it was - financially and morale of the employees. And it just seemed to get worse and worse.
SABLE-SMITH: Putnam County ails from the same conditions that squeeze the finances of many of the nation's rural hospitals. Only about 5,000 people live here, and they tend to be older, poorer, sicker and less insured than the rest of the state. Also like many of those hospitals, Putnam County Memorial looked to cut costs by reducing staff and services. But as more and more patients went to bigger towns for treatment, the hospital came to the brink. As Fleshman recalls...
FLESHMAN: We had - one day, I come in here, and we had $8,000 in the bank. We had a payroll of about 70 or 80,000 coming up.
SABLE-SMITH: One CEO had left. So had the temporary CEO hired to replace him.
FLESHMAN: Those was the darkest days. We didn't think we could get anybody to come in.
SABLE-SMITH: Right about then, Jerry Cummings received a phone call from a physician in the area. Cummings runs a medical consulting business with his wife, Cindy.
JERRY CUMMINGS: We were the only people that he was aware of that he felt could save the hospital.
SABLE-SMITH: So the Cummings loaded up their car at the home in Jefferson City in central Missouri...
CUMMINGS: We drive in our little Fusion.
SABLE-SMITH: ...Drove the three hours north to Putnam County...
CUMMINGS: The wife always drives.
SABLE-SMITH: ...And brought a new idea to the board.
CUMMINGS: Our original thoughts was we would just handle if they was interested in doing a psychiatric wing for the hospital.
SABLE-SMITH: Rather than close its doors, the Cummings were proposing to expand the hospital instead and offer the kinds of services Putnam County residents were driving hours away to receive. The board was sold. They hired the Cummings to run the hospital.
CUMMINGS: Immediately, within 30 days, I brought in three other brand-new physicians.
SABLE-SMITH: And the Cummings brought new specialties to the hospital - anesthesiology, gynecology, cardiology. They rallied the county to pass a more than $7 million bond initiative to buy out the hospital's old debt and renovate an unused wing, and patients started coming back.
CUMMINGS: Our revenues went from 4 million to 22 million - a huge increase. Our average daily census - it was less than one patient a day. Our average daily census now is around 11 to 12 patients.
SABLE-SMITH: And according to a paper published by the Rural Policy Research Institute last November, more cash-strapped rural hospitals could benefit from expanded services. One of the paper's authors is Timothy McBride, a health care columnist at Washington University in St. Louis.
TIMOTHY MCBRIDE: We think that's the way forward for rural hospitals, rather than just sort of a bunker mentality and say we can't proceed.
SABLE-SMITH: And while parts of the Putnam County story are unique, he says if other rural hospitals review how they meet their own missions...
MCBRIDE: It's not impossible to say that you might expand in certain areas. We believe that rural hospitals often can provide very high quality services.
SABLE-SMITH: And to rescue the hospital in Unionville, board member Greg Fleshman says the community had to believe that, as well.
FLESHMAN: I think people had to decide are we going to have a hospital or not, you know? And they wanted it here.
SABLE-SMITH: For NPR News, I'm Bram Sable Smith in Columbia, Mo. Transcript provided by NPR, Copyright NPR.
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