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July 18, 2001
Southern Hospitals Driven to Close
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estimated 35 hospitals in Georgia, Tennessee, and Alabama have closed in the last 13 years, according to the Chattanooga Times Free Press, which points to insufficient Medicare payments from the federal government as a leading cause.

The newspaper's report comes amid threats that another hospital, the 64-bed North Jackson Hospital in Stevenson, Ala., could close within a month if something is not done to erase its nearly $1 million debt.

"We'll lose a lot of lives if it closes," said Stevenson resident Polly Gass.

Rural hospitals throughout the country are suffering the pains of staff shortages as well as limited resources, according to the Times-Free Press.

"It really comes down to a money issue," said Robert Bolden, director of fiscal services for the Georgia Hospital Association.

One rural hospital has closed in the past year in Georgia, but "58 percent of Georgia's rural hospitals are operating in the red, and it's not getting any better," Bolden said.

In Alabama, reports show that 17 rural hospitals have closed since 1987. "We have several rural hospitals that are struggling," said Danne Howard, vice president of government relations with the Alabama Hospital Association. "Seventy-four percent of Alabama hospitals are operating in the red."

And in Tennessee, 17 hospitals, mostly in rural areas, have closed since 1988, according to the Tennessee Hospital Association.

Officials from all three states told the newspaper that they expect the closings to continue if something is not done soon.

"It is very important that we address this issue of health care in rural America," said Jackson County, Ala., resident Becky McCoy, who has led efforts to save North Jackson and was recently appointed to the state's Rural Health Care Commission.

Hospital officials in Alabama, Tennessee, and Georgia all cite decreasing Medicare payments since the federal government's Balanced Budget Act of 1997.

An American Hospital Association study conducted last year by the Lewin Group estimated the long-term effects of the Balanced Budget Act on rural hospitals. Even with restorations by the Balanced Budget Refinement Act of 1999, rural hospitals are expected to lose $15 billion from 1998 to 2004.

A bill under consideration in Washington, the Area Wage and Base Payment Improvement Act, would establish a national standardized rate and eliminate the difference in payments between large urban hospitals and rural and community hospitals.

"It would help improve payments to rural hospitals across the country," Bolden said.

To view the Chattanooga Times Free Press article, click here.
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