By Mike Halstead, Interim Chief Executive Officer, Springfield Hospital
Published in Valley News, 6-27-19
Rural living in Vermont is famous for its vibrant communities and remarkable people. Essential to preserving the character of Vermont’s rural towns is access to local, high-quality health care.
Hospitals and medical practices, like schools, are vital to the health and well-being of a rural community. The existence of these institutions is inexorably linked to local population and, over the last decade, Vermont has seen a population decline in 9 of 14 counties. Add an evolving health care industry and, not surprisingly, Vermont health care facilities are faced with difficult decisions when it comes to keeping the doors open.
Health systems cannot survive on chronically negative operating margins. In Vermont, according to the Green Mountain Care Board, 50% of rural hospitals operated at a loss in 2018. The Sheps Center for Health Services Researchreports over 100 rural hospitals have closed in the country since 2010 and hundreds more are vulnerable. Hospitals and medical practices across the country are desperate to determine economically feasible health care options that meet community needs, will be supported by the community, and maintain local access to quality care. There are no easy answers.
At Springfield Medical Care Systems (SMCS) and Springfield Hospital, we have worked hard to evolve alongside changes in our community and within the industry. We have realigned services, cut expenses, and right-sized operations. But for our hospital and health care system, realigning operations has not been enough. SMCS and Springfield Hospital filed for Chapter 11 – Reorganization protection. This protection enables the health centers and hospital to stay open, to provide high quality health care and critical services in local communities, and to keep jobs in the region.
How did we get to this point? Again, there are no easy answers. It has been the “perfect storm” of financial factors that have contributed to significant losses, including high levels of charity care and bad debt, large claims against our self-insurance pool, decreasing levels of commercial insurance coverage in the region, and inadequate reimbursements. Compounding the situation is the fact that it is very difficult to recruit medical staff to rural areas. According to the Bureau of Health Workforce, at of the end of 2018, there were over 7,000 areas in the U.S. with health professional shortages, the majority in rural places like ours. When we are unable to attract permanent staff, we are forced to hire high-cost temporary clinicians.
At the end of the day, people need local health services to thrive. Rural living shouldn’t mean going without access to health care. There is no replacing a local emergency room during a cardiac event, and every second counts when a child is having an asthma attack in the middle of the night and cannot breathe. Driving 45 minutes or more to the nearest hospital is unthinkable during an emergency.
People with serious chronic illnesses often forgo treatment if they do not have adequate transportation or the financial means to travel to distant health centers. A recent poll bythe Robert Wood Johnson Foundation, National Public Radio and the Harvard T.H. Chan School of Public Health found that 25% of people living in rural areas said they could not get the health care they needed recently. One in four said the barrier to accessing care was either the health care location was too far or getting there was too difficult. People living in the Springfield region should not have to “ride out” illnesses or go without care because they live too far from health care facilities. By restructuring debt, SMCS and Springfield Hospital can improve their financial health and long-term viability so that both organizations can continue provide local, high quality health care.
Springfield Hospital faced an existential threat once before – during the Great Depression. Today, the challenges are no less real, and there is no one-size-fits-all answer to help us through this difficult time in health care. For Springfield Hospital and SMCS, we believe Chapter 11 – Reorganization protection and debt restructuring will enable both organizations to continue serving patients in the region and to keep jobs in the community.
We are in this together and we ask for the continued support of our communities as we face the future. If you need health care services, come and see us. Working together will help us ensure we will be here when you need us most.
About Mike Halstead. Mike Halstead, MBA, is the Interim Chief Executive Officer of Springfield Hospital. With more than 40 years of health care leadership experience, Halstead has guided dozens of hospitals through periods of significant challenge while working collaboratively with employees, physicians and other stakeholders to improve financial performance and maintain a strong focus on quality and patient satisfaction. Halstead is anemployee of Quorum Health Resources.