Rural hospitals move to affiliate with larger urban providers

Rural hospitals, battered in recent years by declining patient censuses and straitened cash flow, now turn to larger hospital systems for financial support, the Buffalo News reported.

For example, 65-bed Brooks Memorial Hospital in the town of Dunkirk, New York has partnered across the border in Pennsylvania with UPMC Hamot, an affiliate of the University of Pittsburgh Medical System, which provides administrative services, according to the article. UPMC Hamot also entered into a similar agreement with Jamestown's WCA Hospital in upstate New York. In Batavia, 100 miles north of Jamestown, the 131-bed United Memorial Medical Center merged with the Rochester General Health System.

The rural providers appear to have little choice in the matter, as the bigger facilities control large parts of existing patient volume. Twelve percent of hospitalizations and 6 percent of inpatient procedures occurred at rural facilities in 2010, according to the National Center for Health Statistics, even though 17 percent of the U.S. population lived in rural areas, reported the Buffalo News.

Rural providers face other financial impediments as well. In states that have declined to expand Medicaid eligibility under the Affordable Care Act, such as Georgia and Pennsylvania, hospitals are burdened with more uninsured patients and lower privately-insured populations compared to more populated areas. Moreover, the possibility that the government will tighten certification requirements for critical access facilities creates further uncertainty.

"Every one of the small, rural hospitals is talking to somebody, because they have to," Kenneth L. Oakley, chief executive officer of the Western New York Rural Area Health Education Center, told the Buffalo News.

The larger systems often offer assistance to the rural facilities for physician recruitment, specialty services expansion or information technology. Rural patients are often pleased that their local facilities are able to expand their specialty services, according to the article.

While the smaller rural facilities may give up some independence, they have numerous options in picking partners. United Memorial, for example, spoke with four potential partners before aligning with Rochester General Health. However, Brooks Memorial had a failed affiliation with the TLC Health Network and filed for bankruptcy before it turned to another partner.

To learn more:
- read the Buffalo News article