Nearly half of rural hospitals at risk of closure in Mississippi, new data shows

Published 9:41 am Wednesday, July 26, 2023

by Devna Bose, Mississippi Today
July 24, 2023

Almost half of Mississippi’s rural hospitals could close, according to a newly updated report.

The report from the Center for Healthcare Quality and Payment Reform shows that 34 of Mississippi’s 74 rural hospitals are struggling financially and at risk of closure. Twenty-five of those are at risk of closing immediately, or within the next couple of years.

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The previous version of the report, which the organization updates every three months, showed 27 hospitals at risk of closure in Mississippi, with 20 at risk of immediate closure.

The new data puts Mississippi third in the country — behind New York and Alabama — for states with the highest percentage of rural hospitals at risk of immediate closure.

The center decides closure risk by analyzing how long hospitals can stay afloat while losing money. Hospitals that can sustain losses for six to seven years are deemed at risk, while those that can offset losses for only two to three years are deemed at immediate risk.

Harold Miller, CEO of the Center for Healthcare Quality and Payment Reform, said Mississippians should be concerned about the new data.

He attributed the hospitals’ worsening financial state to poor payments from private insurers. Miller’s organization advocates for hospital payment reform.

“They will not be able to stay open unless Blue Cross and other private insurance companies pay them enough to cover their costs,” he said.

Blue Cross insures the majority of Mississippians with private insurance. The company went head to head with the state’s largest public hospital, the University of Mississippi Medical Center, for months last year over its reimbursement rates.

An analysis by Mississippi Today and The Hilltop Institute at the University of Maryland, Baltimore County showed that during the throes of the dispute, Blue Cross’ negotiated rates were largely lower than other major private insurance companies for several common procedures.

The updated report is based on the most recent quarterly release of cost report data from the Centers for Medicare and Medicaid Services this month, according to Miller. This data covers hospital finances for 2022 for most hospitals, and in some cases, the first few months of 2023 in addition.

Mississippi’s hospitals have been bleeding out for months.

The pandemic worsened an already dire situation — it became more expensive to continue operations, while hospital profits generally did not increase. Now, health systems are struggling to recoup their losses.

Two-thirds of rural hospitals in Mississippi are losing money caring for patients, the report says.

In recent months, at least one hospital, KPC Promise in Vicksburg, has closed. Others, such as North Mississippi Health Services and Ochsner Health System, have laid off employees. St. Dominic Memorial Hospital not only announced layoffs in June, but also announced the closure of its behavioral health unit.

Miller said Mississippians could see an increasing number of hospitals eliminating important services in order to stay open in the coming months.

Before the end of the session, the Legislature announced a grant program that would bring hospitals a one-time influx of millions of dollars. At the time, hospital CEOs said they were counting on the money to survive the year.

However, hospital officials are now reporting difficulties getting their hands on that money because of restrictions on the federal COVID-19 relief dollars.

Despite support from the majority of Mississippians, Gov. Tate Reeves has continued to oppose Medicaid expansion. Experts say the policy change would not single-handedly solve the hospital crisis, but would help slow the bleeding.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.