There is a grassroots movement, 4300 strong, known as “Save Our Hospital” gaining notoriety in Albert Lea, Minnesota. This story is symptomatic of the fact that hospital consolidation has slowly become a national pastime. With declining revenue under the Affordable Care Act, mergers increased by 70%, leaving small communities scrambling for healthcare access. The latest casualty in the ‘hospital-consolidation-for-sport’ trend is Albert Lea, a small city located in Freeborn County, Minnesota.
Known affectionately as the ‘Land between the Lakes,’ it has a population of 18,000 spread over 14 square miles. Not surprisingly, Mayo is their largest employer; the 70-bed hospital serves almost 60,000 in a region including patients who live in Iowa. In Rochester, MN, the Mayo Clinic is regarded by many as one of the premier medical facilities in the country. Originally of humble origins, founder William Mayo opened a practice during the Civil War and later, passed it down to his sons; today, the Mayo Clinic flagship is located in Rochester, Minnesota and plans to become a renowned premier medical destination for the world.
Corporations with such lofty ambitions tend to make “small” sacrifices along the way; often, on the back of a beloved rural town. On June 12, Mayo clinic administrators announced they would transition all inpatient services to Austin, more than 20 miles away. Mayo cited ongoing staff shortages, reduced inpatient censuses, and ongoing financial difficulties as their reasons for hospital closure. Rural care was mentioned to be at a crisis point, which is an altogether callous assessment of the troubling situation facing communities across this country.
The Albert Lea City and County Hospital Association formed in 1905 when concerned citizens raised funds to build a community hospital. Renamed Naeve Hospital, after a prominent donor, it became the lifeblood of this rural community. Physician groups collaborated to start the Albert Lea Clinic and Albert Lea Medical and Surgical Centers. For financial reasons, on Jan. 1, 1997, Albert Lea’s Clinics and Naeve Hospital merged with the Mayo Medical Center in Rochester. At that time, a now-retired local physician expressed concern about the challenges of recruiting physicians to the rural locale. Mayo, however, scoffed at his assertion. Recently, Dr. Bobbie Gostout, Vice President of Mayo Health Clinics, confirmed it was indeed difficult to recruit newly trained physicians to small areas with a heavy night call burden.
It is estimated the facility in Albert Lea sees 500 patients per day including office visits, dialysis, cancer care, and other outpatient services. Approximately 7 patients per day will be affected by this move. Freeborn County Attorney David Walker is evaluating if Mayo violated their bylaws by not holding a vote for the consolidation decision. Mayo is denying a vote was necessary. Walker has asked the state Attorney General to weigh in on the debate.
Hospitals across the nation are focusing on efficiency while trying to improve care quality and maximize revenue. Consolidation can help lower overhead expenses; however, over time, the heartland and the people being served suffer for a variety of reasons. Mayo administrators blame $13 million in losses over the last two years at the Austin and Albert Lea campuses as the cause for hospital closure. Prior to making this pivotal move, Mayo conducted an 18-month internal review; unfortunately, neither the City Council nor County Commissioners were consulted. In July, Albert Lea City Council unanimously approved a resolution requesting Mayo halt the process until 2018, in order to solicit feedback from the community impacted by this decision. The Freeborn County Board also called for a six-month moratorium from Mayo. Both requests were denied by the behemoth that is Mayo.
Not every community member in Albert Lea is opposed to hospital closure. Some physicians working at Mayo feel they are stretched too thin and cannot survive with two rural facilities to staff. Recruiting nurses and physicians has been extremely challenging, according to them. The hospital in Austin is 20 minutes away, which they feel is adequate, alternatively, Owatonna is 25 minutes north, and Mankato is 35 minutes away and has a Mayo helicopter stationed there for medical evacuation needs.
Mariah Lynne, co-founder of Save Our Hospital, said “Our mission for Save Our Hospital is to maintain a full service, acute hospital in Albert Lea, Minn., for the benefit of our citizens and our surrounding citizens.” This grassroots organization is asking Mayo to return the hospital facility to Albert Lea so they can find another company interested in providing hospital services for their residents. The Service Employees International Union (SEIU), which covers healthcare workers, is also supporting this community effort.
Mayo plans to move intensive care, labor and delivery, and surgery services to the Austin facility, which is more than 20 minutes away. Reduced access to timely medical care can actually translate into higher mortality in rural areas overall. Since 1990, maternal mortality in the United States has been increasing steadily. Today, more American women are dying of pregnancy-related complications than in any other developed country throughout the world. Rural hospitals, which are financially struggling, are less prepared for maternal emergencies today than they were two decades ago. Potentially fatal complications which are initially treatable may become lethal in the setting of fewer resources and longer travel distance when seeking care.
Mayo appears to be sacrificing a rural hospital in Albert Lea to pursue ‘champagne wishes and caviar dreams.’ Mayo plans to invest in the Destination Medical Center Project, focused on drawing foreign visitors who will bring with them not only champagne and caviar, but also open wallets. Two major projects in Rochester are currently under way – the expansion of the Mayo Civic Center to the tune of $84 million and $93 million in upgrades at Mayo’s St. Mary’s Hospital. When asked about complaints regarding the loss of services in Albert Lea while making elaborate plans in Rochester, Dr. Gastout said investments are helping to shore up Mayo’s long term survival. She denies allegations the exorbitant Destination project is related to the Albert Lea Hospital closure, stating “Growth should not be misinterpreted as easy sailing in one place, and difficulties in another.”
Reflecting on the loss of rural hospitals across the nation, my thoughts circle back to residents in Lee County, Georgia and my hometown in Kitsap County, Washington. All three groups are engaged in clashes of David and Goliath-esque proportion against conglomerate hospital corporations threatening to destroy their respective healthcare landscapes. While they might make strange bedfellows, City and County leaders are finding common interests aligning with local unions supporting healthcare workers, such as the SEIU (Minnesota) and UFCW-21 (Washington State.) Together, these innovative alliances are making significant progress which may turn the tide. For some of the large hospital systems, “easy sailing” may soon look like nautical navigation during a tropical storm. While corporate headquarters is distracted with their dwindling bottom lines, betting on the underdogs seems prudent; after all, they are the ones gambling with their lives.
Niran Al-Agba, MD is a pediatrician based in Washington state.
Categories: Uncategorized
For what it’s worth, here are some of my immediate thoughts upon reading this article. The decision to close this rural clinic was very obviously influenced by the (financial) bottom line and when the numbers don’t make sense, that decision becomes clearer. The effects that decisions in healthcare have on a clinic’s or medical group’s constituents certainly deserve airtime during those decision making processes, but a lot of times, it really comes down to keeping the budget in check. Unfortunately, sometimes this results in consequences for the underdogs. Many hospitals have negative operating margins and in an attempt to make that gap narrower, sometimes decisions have to be made that will be controversial to some. In many scenarios related to health care management and beyond, there will never be a way to make all parties and stakeholders happy. The question of how drastic a decision is and how inconvenient and unfortunate is too inconvenient and unfortunate for those that are negatively affected is where things get really tricky and where the controversy and unhappiness springs from.
Nonetheless, the root of the reason why this clinic closed is, as stated at the beginning of the post, related to the decline in revenue seen under the Affordable Care Act. This is a problem I do not have anywhere near enough knowledge or experience in health policy and management to address in a productive enough way to post it live on the internet and be responsible for. However, I do think that there has to be some way of addressing both parties’ grievances. The Mayo Clinic needs to conserve or reallocate resources, while the rural Minnesota community does not want to get left behind. Perhaps there could be engagement between hospital management and the community members in the form of focus groups or a vote about next steps in dealing with and adjusting to the consequences of this closure now that we are on the other side of this decision.
Another aspect of this problem that likely contributed to the ultimate decision is that physicians felt they were stretched too thin trying to staff so many rural facilities and that recruiting new nurses and physicians was very challenging. This is another very broad problem that I feel I do not have the expertise to offer a feasible solution to, but it is worth calling attention to how to incentivize physicians who undertake careers in rural care. I would not be surprised if the reason there is a shortage in this realm is because the incentives pale in comparison to other specialties that a physician has the choice of going into. How can we change that and get more medical students and residents interested in rural medicine? I do not have the answer for that, but as much as we would like to think it would come from the good of their hearts, it probably won’t. Student debt, especially that of medical students, is too high a burden for these burgeoning physicians to want to go into sectors of the health care system that are not as lucrative as others.
One last consideration in the fiasco is that of the suspicion that this closure had something to do with the investments made in the Destination Medical Center Project, which is expected to bring in more revenue for the organization. Community members are understandably very upset about this, which has understandably sparked the entire movement that this article is about, but could there be a silver lining? Will the organization make enough money from this new project they are investing in to someday reopen or revamp a different rural clinic and bring the rural health landscape back to life? Maybe that is not even a thought on the organizational horizon of the company, but I suppose only time will tell. Perhaps this story is not quite over yet.
Thanks for the link to the lund report piece….excellent analysis!
Minnesota is not alone. Consolidation is not improving access or lowering costs. Oregon is dealing with similar problems from monopolies:
https://www.thelundreport.org/content/healthcare-reform-creates-provider-monopolies
Steve, I can’t really disagree with most of what you said. Yes, Albert Lea hospital was in financial trouble from the research I have done prior to being sold to Mayo. It is difficult to recruit staff and basically #6 sums it up nicely. Small hospitals must be realistic about what they can offer. Sometimes, if we could take a step back and start over in healthcare, ie build it from the ground up, it could organically add service lines as needed over time. We have a new family med residency program starting and there is no reason that a microhospital couldn’t be used in this type of setting. Some communities do lack the tax base as you have discussed, but in ones where there is interest, unconventional solutions should be implemented.
I have written a piece on microhospitals and they are pretty interesting. You are correct. They need a larger hospital to be associated with. We basically have that already in my hometown. Only one of the hospitals has OB and many of us left the county to receive OB care. Right now, ortho surgery is done at one place and general surgery at the other until they transition. Micro is exactly the right term… think small but bed space for basic general short stay admits…
We should get someone to write about the micro-hospitals. It was my understanding that these are basically money making places being built in generally affluent areas that don’t have quick access to larger hospitals. Vegas has some I believe (according to friends) as does Phoenix and some other southern cities with large suburban areas. If this is working for rural areas that are low on financial resources I am unaware of it. Would love to hear what they are doing since it is basically what our network is doing, but it only works when you have a strong association with a larger hospital network. Need someplace to send the sick patients.
Also, Also, how do you plan on fully staffing OB and a surgery unit at these small places?
Steve
1) They are correct that it is difficult to recruit staff for small rural hospitals. It is part of what I do and it takes a lot of time and creativity, but mostly I have been lucky. At one of our smaller hospitals we have been unable to obtain 7 day a week general surgery coverage. Most weekends have no ortho coverage.
2) At least in our area, there is a general shortage of OB docs. We are having trouble recruiting staff for a large hospital in a medium sized town an hour away from two major cities. I cannot imagine recruiting staff to come to a small rural place. Rural hospitals largely don’t have the resources to care for those sick patients if you think having OB at these places will reduce maternal mortality. (Please note that fetal mortality rates are not climbing.) What we need is better care at places where people are able to recognize problems and take care of the sicker patients we now see on OB. Having these same patients cared for at small hospitals that do only 200-300 deliveries a year, I don’t believe, is the answer. When problems do occur and you are going to try to rescue the mother, small rural hospitals of this size don’t have the staff resources or sometimes not even the blood bank to rescue people. ICU care is also likely pretty minimal, usually covered by hospitalists at best. Good luck getting specialists to come in.
3) What was the financial condition of this hospital before they sold themselves to Mayo? (Really, before you weigh in on these situations, this is probably the most important thing to know.) If the hospital was financially solid, they would probably not have sold themselves to Mayo. If they were financially healthy, again unlikely, they should have put in an escape clause. If, as is much, much more likely, they were in financial trouble and that is why they sold themselves to Mayo, I doubt they have much recourse. What we have seen is that the communities in these kinds of area often don’t have the tax base to support a community hospital. (The Georgia hospital you cited before is in a fairly well to do area, so they might be OK.)
4) Just to be clear, the big hospital networks can be at fault here. They sometimes buy these small places intending to farm them for the kind of “big care” that pays them well. Major surgeries, cancer care, etc. Would need to know the details here. In general though, the big networks are hoping to show a profit also at the rural hospitals when they buy them. If they bought several small hospitals in the area, it would not surprise me if they had planned on shutting one down all along.
5) If rural hospitals worked together better, they could solve some of these problems. Instead, they often see each other as competitors. If they were better at sharing resources, including staff, they would be more financially viable. To be sure, this does go on in some places, but not everywhere.
6) Finally, an awful lot of this is just due to rural areas in general having more poverty. If small hospitals are going to continue to exist and thrive in rural areas they are going to have to be realistic about what services they can offer. (The lean plan you suggest will work for some.) Rural hospitals in poor areas face really difficult challenges and I think that many of those communities will lack the tax base at the local level to save them. Again, I know little about these two small hospitals you have talked about, but I do know that the ones we took over were actively looking for help and looking to be taken over.
Steve
Most are community owned to begin with… then the Board of Directors agrees to sell it. First to a local corporation, then that corporation merges with another, then another, and soon to be another requiring approval from the Vatican. Communities are complicit initially, because they believe the corporation is genuinely interested in their well being, but many find out this is not true. I believe these communities should revoke the tax-exempt status if the hospital is not holding up its charity care mandate. Or maybe take the closed facility back by eminent domain.
We are at the beginning of a time where communities are fighting for ownership again. It will be interesting to see how it plays out in the future.
“There are many different ways to keep a community hospital.”
First you have to own it. I think all hospitals should be community owned and tax subsidized when operated efficiently. They then make decisions based on community need not distant corporate finances.
Why did not your community step forward to purchase this hospital?
Peter, your question is a good one. There are many different ways to keep a community hospital. 1) Become a Hospital district, pass a levy, and raise money from a tax base to support repairs or staffing etc… after soliciting community vote, IF the community would like to do that. 2) recruit another organization, such as Swedish, Virginia Mason, Providence, Kaiser, well you get the idea. 3) My personal favorite is conversion to a micro-hospital. Micro-hospitals are the lean, mean, fighting machines of hospital based care. They are smaller scale, built to serve a specific population, and focus on short-stay admissions (<48 hours.) Dignity health is a company having great success in this area in Arizona and is looking to do this in California. As fewer patients need to stay in hospitals over time, the bed need per region is decreasing, so the micro-hospital trend is likely here to stay.
If you ask me about Albert Lea specifically, my recommendations would be to close pediatrics, or other non-essential hospital services but keep the ER, basic inpatient beds, surgical beds, and L & D. These are really important for small communities and actually make a difference in morbidity and mortality numbers.
Thanks Dr. Nelson. Our increased costs are due in large part to this hospital consolidation game. The more hospitals own private clinics, radiology suites, or surgicenters… the higher the overall costs. That extra $ goes to the CEO at the top. I know Barry will say that individual sets the tone for the organization etc. and he is partially right. My counterpoint to that statement is a physician does not need a businessperson to “set the tone” of anything while in their private office. If we cut out facility fees, spread reimbursement in a fair way comparing apple services to apple services etc, then costs will come down and independent offices can survive and thrive. Thanks for reading!
Barry, the point of this post is not necessarily expecting Mayo to subsidize the community hospital, rather the community is asking for the facility to be returned. This is not about the fact that rural areas have cheap homes, this is a community of people who want and need basic health care. Mayo gets a substantive tax break in that community. They should not still be receiving the exemption is they are closing the facility. So either settle out the difference and pay the community for the property taxes or allow them to exchange it and find another provider to run a small community hospital. Yes, another option is to become a Hospital District, and use tax funds or levies to fund the hospital.
“For financial reasons, on Jan. 1, 1997, Albert Lea’s Clinics and Naeve Hospital merged with the Mayo Medical Center in Rochester.”
How would you have kept the hospital a community hospital?
Fundamentally, academic healthcare centers are financially precarious. They have, nation wide, hedged their stability on a wider base of community healthcare. This is a tumultuous deviation for Universities, since their heritage has been to be isolated from the day to day affairs of their social context as a means to more independently pursue the preservation and advancement of fundamental systems of knowledge. No other portion of a University has an involvement in the fabric of our nation’s civil life to the financial extent that its medical school has. Its no wonder that a very influential presence in Washington D.C. is the American Association of Medical Colleges as a lobby for the stability of medical school finance: research budgets, Medicare/Medicaid reimbursement strategies, and medical education funding. In the meantime, our nation’s healthcare continues to be plagued by substantial cost and quality problems, largely because it lacks a means to offer enhanced Primary Healthcare that is equitably available and ecologically accessible to each citizen, community by community. This will never be solved as long as our nation’s health enterprise institutions primarily pursue “market-share” as their business model.
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When the Mayo Clinic institutions of our nation can receive 100% cash reimbursement from their international clientele, its not difficult to understand why a connection to the realities of a local connection to the Common Good would be unacceptable. The ultimate Social Dilemma for each Mayo Clinic of our land is that they can either make a commitment to community needs and their Common Good OR eventually be forced to function in a nationalized healthcare industry that is highly centralized, autocratic and coercive.
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Remember, the other 34 developed nations of the world devote 10-12% of their economy on health spending. Last year, our health spending was 18.2% of the GDP. The difference between 13% and 18% was @$1 Trillion for our GDP last year. The nearly $450 Billion paid by the Federal government for health spending in 2016 was almost equal to the Federal deficit last year. In essence, our nation is headed to bankruptcy on the back of our nation’s health spending.
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Niran, another well presented story.
The hospitals are always telling us “No margin, no mission.” There is a long term secular trend driving down the need for inpatient hospital beds as more and more care can safely be delivered on an outpatient basis and inpatient stays are getting shorter due to a combination of less invasive surgical procedures and better drugs. I don’t think it’s reasonable to expect Mayo or any other hospital system to subsidize individual hospitals that chronically lose money. At the same time, if state and / or county politicians think it’s necessary and desirable to keep such hospitals in business, they can vote to raise taxes on their constituents to pay for subsidies to make that possible.
There are inherent tradeoffs in much of life including where we choose to live. Rural residents generally need to drive longer distances for everything from medical care to schools to supermarkets to shopping malls. On the positive side, housing is vastly cheaper per square foot than it is in the cities and close in suburbs and the rural homes typically come with more land which a lot of people like.