Rural Hospitals Are Caught in an Aging-Infrastructure Conundrum

Published

1 year ago

January 16, 2024

admin

Kevin Stansbury, the CEO of Lincoln Community Hospital in the 800-person town of Hugo, Colorado, is facing a classic Catch-22: He could boost his rural hospitals revenues by offering hip replacements and shoulder surgeries, but the 64-year-old hospital needs more money to be able to expand its operating room to do those procedures.

This story also ran on Fortune. It can be republished for free.

I’ve got a surgeon that’s willing to do it. My facility isn’t big enough, Stansbury said. And urgent services like obstetrics I can’t do in my hospital, because my facility won’t meet code.

Besides securing additional revenue for the hospital, such an expansion could keep locals from having to drive the 100 miles to Denver for orthopedic surgeries or to deliver babies.

Rural hospitals throughout the nation are facing a similar conundrum. An increase in costs amid lower payments from insurance plans makes it harder for small hospitals to fund large capital improvement projects. And high inflation and rising interest rates coming out of the pandemic are making it tougher for aging facilities to qualify for loans or other types of financing to upgrade their facilities to meet the ever-changing standards of medical care.

Most of us are operating at very low margins, if any margin at all, Stansbury said. So, we’re struggling to find the money.

Aging hospital infrastructure, particularly in rural areas, is a growing concern. Data on the age of hospitals is hard to come by, because hospitals expand, upgrade, and refurbish different parts of their facilities over time. A 2017 analysis by the American Society for Health Care Engineering, a part of the American Hospital Association, found that the average age of hospitals in the U.S. increased from 8.6 years in 1994 to 11.5 years in 2015. That number has likely grown, industry insiders say, as many hospitals delayed capital improvement projects, particularly during the pandemic.

Research published in 2021 by the capital planning firm Facility Health Inc., now called Brightly, found that U.S. health care facilities had deferred about 41% of their maintenance and would need $243 billion to complete the backlog.

Rural hospitals dont have the resources of larger hospitals, particularly those in hospital chains, to fund billion-dollar expansions. Email Sign-Up

Subscribe to KFF Health News' free Morning Briefing. Your Email Address Sign Up

Most of todays rural hospitals were opened with funding from the Hill-Burton Act, passed by Congress in 1946. That program was rolled into the Public Health Service Act in the 1970s and, by 1997, had funded the construction of nearly 7,000 hospitals and clinics. Now, many of those buildings, particularly those in rural areas, are in dire need of improvements.

Stansbury, who is also board chair of the Colorado Hospital Association, said at least a half-dozen rural hospitals in the state need significant capital investment.

Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, a think tank in Pittsburgh, said the major problem for small rural hospitals is that private insurance is no longer covering the full cost of providing care. Medicare Advantage, a program under which Medicare pays private plans to provide coverage for seniors and people with disabilities, is a major contributor to the problem, he said.

You’re basically taking patients away from what may be the best payer that the small hospital has, and pushing those patients onto a private insurance plan, which doesn’t pay the same way that traditional Medicare pays and ends up also using a variety of techniques to deny claims, Miller said.

Rural hospitals also must staff their emergency rooms with physicians round-the-clock, but the hospitals get paid only if someone comes in. The facility opened in 1959 after soldiers coming back from World War II decided that Lincoln County on the eastern Colorado plains needed a hospital. Now, management wants to expand it.(Lincoln Health)

Meanwhile, labor costs coming out of the pandemic have increased, and inflation has driven up the cost of supplies. Those financial headwinds will likely push more rural hospitals out of business. Hospital closures dropped during the pandemic, from a record 18 closures in 2020 to a combined eight closures in 2021 and 2022, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina-Chapel Hill, as emergency relief funds kept them open. But that life support has ended, and at least nine more closed in 2023. Miller said closures are reverting to pre-pandemic rates.

That raises concerns that some hospitals might invest in new facilities and end up shutting down anyway. Miller said only a small portion of rural hospitals might be able to make a meaningful difference to their bottom lines by adding new services.

Lawmakers have tried to help. California, for example, has loan programs charging low to no interest that rural hospitals can participate in, and hospital representatives are urging Colorado legislators to approve similar support.

At the federal level, Rep. Yadira Caraveo, a Colorado Democrat, has introduced the bipartisan Rural Health Care Facilities Revitalization Act, which would help rural hospitals get more funding for capital projects through the U.S. Department of Agriculture. The USDA has been one of the largest funders of rural development through its Community Facilities Programs, providing over $3 billion in loans a year. In 2019, half of the more than $10 billion in outstanding loans through the program helped health care facilities.

Otherwise, facilities would have to go to private lenders, said Carrie Cochran-McClain, chief policy officer for the National Rural Health Association. More from the Mountain States

Rural hospitals might not be very attractive to private lenders because of their financial constraints, and thus may have to pay higher interest rates or meet additional requirements to get those loans, she said.

Caraveos bill would also allow hospitals that already have loans to refinance at lower interest rates, and would cover more categories of medical equipment, such as devices and technology used for telehealth.

We need to keep these places open, even not just for emergencies, but to deliver babies, to have your cardiology appointment, said Caraveo, who is also a pediatrician. You shouldn’t have to drive two, three hours to get it.

Kristin Juliar, a capital resources consultant for the National Organization of State Offices of Rural Health, has been studying the challenges rural hospitals face in borrowing money and planning big projects.

Theyre trying to do this while they’re doing their regular jobs running a hospital, Juliar said. A lot of times when there are funding opportunities, for example, the timing may be just too tight for them to put together a project.

Some funding is contingent on the hospital raising matching funds, which may be difficult in distressed rural communities. And most projects require hospitals to cobble together funding from multiple sources, adding complexity. And since these projects often take a long time to put together, rural hospital CEOs or board members sometimes leave before they come to fruition.

You get going at something and then key people disappear, and then you feel like you’re starting all over again, she said. Expansion of Lincoln Community Hospital could keep locals from having to drive the 100 miles to Denver for orthopedic surgeries or to deliver babies.(Lincoln Health)

The hospital in Hugo opened in 1959 after soldiers coming back from World War II decided that Lincoln County on the eastern Colorado plains needed a hospital. They donated money, materials, land, and labor to build it. The hospital has added four family practice clinics, an attached skilled nursing facility, and an off-site assisted living center. It brings in specialists from Denver and Colorado Springs.

Stansbury wold like to build a new hospital roughly double the size of the current 45,000-square-foot facility. With inflation easing and interest rates likely to go down this year, Stansbury hopes to get financing lined up in 2024 and to break ground in 2025.

The problem is, every day I wake up, it gets more expensive, Stansbury said.

When hospital officials first contemplated building a new hospital three years ago, they estimated a total project cost of about $65 million. But inflation skyrocketed and now interest rates have gone up, pushing the total cost to $75 million.

If we have to wait another couple of years, we may be pushing up closer to $80 million, Stansbury said. But we’ve got to do it. I can’t wait five years and think the costs of construction are going to go down.

Markian Hawryluk: MarkianH@kff.org, @MarkianHawryluk Related Topics Health Industry Rural Health States California Colorado Hospitals Contact Us Submit a Story Tip

Entertainment

Lady Gaga puts on her biggest-ever show for free on Rio’s Copacabana Beach

Published

3 hours ago

May 4, 2025

admin

Lady Gaga puts on her biggest-ever show for free on Rio's Copacabana Beach

Lady Gaga has performed in front of an estimated 2.1 million people at a free show on Rio de Janeiro’s Copacabana Beach.

Some 500,000 tourists travelled to watch the concert, which was paid for by the city in an attempt to boost the struggling economy.

Saturday night’s two-hour show, which marked Gaga’s biggest ever, marked the first time she had played in Brazil since 2012, having cancelled an appearance at the Rock in Rio festival in 2017 over health issues.

Gaga, who released her seventh studio album, Mayhem, in March, opened with a dramatic, operatic edition of her 2011 track Bloody Mary, before launching into Abracadabra, one of her most recent hits.

“Brazil! I missed you. I missed you so much,” she exclaimed, before launching into Poker Face, one of her biggest hits.

The American pop star drew in a similar crowd to Madonna’s in May last year, who performed at the same beach, which is transformed into an enormous dance floor for the shows.

Addressing the crowd in English and through a Portuguese translator, Gaga became emotional as she said: “I’m so honoured to be here with you tonight.

“Tonight we’re making history, but no one makes history alone. Without all of you, the incredible people of Brazil, I wouldn’t have this moment. Thank you for making history with me.

“The people of Brazil are the reason I get to shine today. But of all the things I can thank you for, the one I most am grateful for is this: that you waited for me. You waited more than 10 years for me.”

She said it took so long to come back because she was “healing” and “getting stronger”. The pop sensation cancelled many of her shows in 2017 and 2018 due to her fibromyalgia condition, which can cause pain and fatigue.

It is estimated Gaga’s show will have injected around 600 million reais (£79.9m) into the economy, nearly 30% more than Madonna’s show.

The large-scale free shows are set to continue annually until at least 2028, always taking place in May, which is considered the economy’s “low season”, according to the city’s government.

A hefty security plan was in place, including the presence of 3,300 military and 1,500 police officers, along with 400 military firefighters.

‘A dream come true’

The city has been swarmed with Gaga fans since her arrival on Tuesday, with some even keeping vigil outside of the hotel she has been staying at.

Many arrived at the beach at the crack of dawn on Saturday to secure good spots on the beach, despite the show not starting until 9.45pm.

Ana Lara Folador, who attended with her sister, said it was “a dream come true”, and that Gaga had “really shaped a part of my personality, as a person and an artist”.

Ingrid Serrano, a 30-year-old engineer who made a cross-continent trip from Colombia to Brazil to attend the show, turned up in a T-shirt featuring Lady Gaga’s outlandish costumes over the years.

“I’ve been a 100% fan of Lady Gaga my whole life,” she said, adding the 39-year-old megastar represented “total freedom of expression – being who one wants without shame”.

Matheus Silvestroni, 25, an aspiring DJ and a Gaga fan since the age of 12, endured an eight-hour bus ride from Sao Paulo for the show.

He said it was Gaga who had inspired him to embrace his sexuality and pursue his dream of becoming an artist.

“I was bullied because I was a fat, gay kid, so I was an easy target,” he said. “Gaga was very important because she sent a message that everything was okay with me, I wasn’t a freak, because I was ‘Born This Way’.”

Rio is known for holding massive open-air concerts, with Rod Stewart holding a Guinness World Record for the four million-strong crowd he drew to Copacabana Beach in 1994.

Politics

Conservatives call for Labour’s Lucy Powell to resign over grooming gang remarks

Published

3 hours ago

May 4, 2025

admin

Conservatives call for Labour's Lucy Powell to resign over grooming gang remarks

The Conservatives are calling for Lucy Powell to resign after the Labour MP’s exchange with a commentator about grooming gangs.

The comment was made by Ms Powell, the leader of the House of Commons, after Conservative political commentator Tim Montgomerie started to ask a question on BBC Radio 4’s Any Questions.

“I don’t know if you saw the documentary on Channel 4 about rape gangs,” he started, in relation to the recent programme Groomed: A National Scandal, which centred around five girls who were sexually abused by rape gangs.

Ms Powell, who is MP for Manchester Central, responded: “Oh, we want to blow that little trumpet now, do we? Yeah, OK, let’s get that dog whistle out.”

Sir Keir Starmer and the government have been under sustained pressure from political opponents over the handling of historical sex abuse cases in the UK.

ConservativeHome founder Mr Montgomerie, who will be appearing on Sunday Morning With Trevor Phillips, continued: “There is a real issue where… There were so many people in local government, in the authorities, who, for good reason, were worried about upsetting community tensions, that those girls went undefended.”

The conversation moved on, but politicians criticised Ms Powell’s comment, with some calling for her to resign.

Shadow home secretary Chris Philp said in a statement: “This shocking outburst from a Labour cabinet minister belittles the thousands of girls and women who were raped by grooming gangs over decades.

“We have consistently called for a national enquiry in parliament, which has been blocked by Labour ministers who don’t seem to know or care about the disgusting crimes which have been perpetrated.

“Anyone who has seen the shocking Channel 4 documentary will know that it is clearer than ever that this is not a ‘dog whistle’.

“To dismiss thousands of victims who were raped and the cover up that followed is sickening. She should resign.”

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Shadow justice secretary Robert Jenrick said: “Labour’s Lucy Powell thinks it’s a ‘dog whistle’ to demand arrests and accountability for the rape gangs. What a disgusting betrayal of the victims. They are part of the cover-up.”

Ousted Reform MP Rupert Lowe, now an independent, shared a letter he wrote to Ms Powell demanding she apologise, calling her comments “deeply, deeply offensive”.

On X on Saturday night, Ms Powell said: “In the heat of a discussion on AQ, I would like to clarify that I regard issues of child exploitation and grooming with the utmost seriousness. I’m sorry if this was unclear.

“I was challenging the political point scoring around it, not the issue itself. As a constituency MP I’ve dealt with horrendous cases. This Gvt is acting to get to the truth, and deliver justice.”

Sky News has contacted the office for the Leader of the House of Commons for comment.

The long-running row over grooming cases has continued after Labour promised five local inquiries into grooming gangs in January.

Tech billionaire Elon Musk had accused Sir Keir of being “complicit” in the failure of authorities to protect victims and prosecute abusers while the PM was director of public prosecutions from 2008-2013.

The prime minister has repeatedly defended his record, saying it shows he tackled the issue head-on.

World

Israeli pilots’ protest letter reveals deepening rift over ongoing war in Gaza

Published

3 hours ago

May 4, 2025

admin

Israeli pilots' protest letter reveals deepening rift over ongoing war in Gaza

The Israeli Air Force is regarded as one of the country’s most elite units.

So, when hundreds of current and former pilots call for an end to the war in Gaza to get the hostages out, Israelis take notice.

This month, 1,200 pilots caused a storm by signing an open letter arguing the war served mainly “political and personal interests and not security ones”.

Israeli Prime Minister Benjamin Netanyahu said the original letter was written by “bad apples”.

But Guy Paron, a former pilot and one of those behind the letter, said the Israeli government had failed to move to phase two of the ceasefire deal with Hamas, brokered under US President Donald Trump.

That deal called for a full withdrawal of Israeli forces from Gaza and the release of all the remaining hostages. Mr Netanyahu continues to argue that the war must continue to put pressure on Hamas.

Mr Paron said the (Israeli) government “gave up or violated a signed agreement with Hamas” and “threw it to the trash”.

“You have to finish the deal, release the hostages, even if it means stopping that war,” he argued.

It’s not the first time Israeli pilots have taken up a cause. Many of them also campaigned against Mr Netanyahu’s 2023 judicial reforms.

“In this country, 1,000 Israeli Air Force pilots carry a lot of weight,” Mr Paron added.

“The Air Force historically has been the major force and game-changer in all of Israel’s wars, including this current one. The strength of the Air Force is the public’s guarantee of security.”

Anti-government campaign spreads

Now, the open letter campaign has spread to other parts of the military.

More than 15,000 people have signed, including paratroopers, armoured corps, navy, special units, cyber and medics. The list goes on.

Dr Ofer Havakuk has served 200 days during this war as a combat doctor, mostly in Gaza, and believes the government is continuing the war to stay in power.

He has also signed an open letter supporting the pilots and accused the prime minister of putting politics first.

He said Mr Netanyahu “wants to keep his coalition working and to keep the coalition together. For him, this is the main purpose of the war”.

A ceasefire could lead to the collapse of the prime minister’s fragile far-right coalition, which is opposed to ending the war.

Threat of dismissal

The Israeli military has threatened to dismiss those who have signed protest letters.

We met a former pilot who is still an active reservist. He didn’t want to be identified and is worried he could lose his job.

“This is a price that I’m willing to pay, although it is very big for me because I’m volunteering and, as a volunteer, I want to stay on duty for as long as I can,” he told us.

The controversy over the war and the hostages is gaining momentum inside Israel’s military.

It is also exposing deep divisions in society at a time when there is no clear sign about how the government plans to end the war in Gaza, or when.

The renewed war in Gaza over the last year and a half followed deadly Hamas attacks on Israel on 7 October 2023, which killed 1,200 people, mostly civilians, and saw around 250 taken hostage.

More than 51,000 people have been killed in Gaza during the Israeli military’s response, many of them civilians, according to the enclave’s Hamas-run Ministry of Health.