May 20, 2024 - News

Half of Georgia's rural hospitals struggle financially

Map showing share of rural hospitals in each state with negative operating margins in 2024. Nationally, 50% of rural hospitals have negative operating margins. The states with the highest share of rural hospitals operating at a loss are Kansas (89%), New York (83%) and Wyoming (83%) while Utah had the lowest share, at 16%.
Data: Chartis; Map: Alice Feng/Axios

More than half of Georgia's rural hospitals are financially struggling, according to a report released earlier this year.

Why it matters: Georgians use rural hospitals for emergencies and other care.

  • Also, hospitals are often among the largest employers in rural communities, the report from health care consultancy Chartis notes.

The big picture: Georgia's health care system is under pressure — and disproportionately so in rural Georgia, according to the Georgia Budget & Policy Institute.

  • But it's not just health. Axios Atlanta reported last year on what's long been called the "Two Georgias" problem: where Atlanta excels, rural Georgia often struggles. The capital city keeps growing in population while rural areas are shrinking. And rural Georgians on average make less money.

By the numbers: Georgia has 67 rural hospitals. Of those, 57% are in the red, Chartis reports. Their median operating margin is -2.20%.

  • 9 rural Georgia hospitals have closed, one stopped providing inpatient care, and 18 are at risk of closure.
  • 23 have stopped offering chemotherapy over the last decade to remain financially viable.

Follow the money: CareSource, the Medicaid care management organization managing part of Georgia's Medicaid caseload, told the AJC that it is budgeting $5 million to help rural hospitals and nursing homes with cash flow challenges.

  • Georgia's State Office of Rural Health invested $17.7 million in state funds and $9.3 million in federal funds in rural hospitals last year.

Between the lines: Michael Topchik, author of the Chartis report, told the AJC the data shows how "not expanding Medicaid is hurting Georgia."

  • Gov. Brian Kemp opposes what he calls "one size fits none" Medicaid expansion and instead deploys the Pathways to Coverage program, which offers Medicaid to people making about $15,000 a year if they work or are in school.
  • The program has had only 3,500 people since it began in July 2023, the AJC reports.
  • North Carolina, on the other hand, has enrolled at least 380,000 beneficiaries since expanding Medicaid in December.

What they're saying: "What you're really talking about is loss of access in the places where we need it — one could arguably say, most," says Topchik.

The other side: A Kemp spokesperson told Axios that Medicaid is not the answer to saving rural hospitals due to "many factors, including lower reimbursement rates."

  • He said six of the top 10 states with the highest percentage of rural hospitals at risk of closure were states that had expanded Medicaid. He also said 16 of the top 20 states with the highest percentage of hospitals reporting loss of services are Medicaid-expansion states.
  • Additionally, the spokesperson said Georgia Pathways is one portion of the governor's healthcare plan. Other options include Georgia Access, which is Georgia's state-based health insurance marketplace for residents ineligible for Medicaid. He said 709,000 Georgians making up to $22,590 a year have private health insurance thanks to the Georgia Access marketplace enrollment program.

Editor's note: This article has been updated to add comments from the governor's office.

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