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Pandemic shows importance and challenges of rural hospitals

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Astria Health emerging from bankruptcy is good news for rural communities, like those in the Lower Yakima Valley.

The value of rural hospitals and health care systems is more apparent than ever during the COVID-19 pandemic, said Jacqueline Barton True, vice president of rural health programs for the Washington State Hospital Association.

Barton True said she could not comment specifically on Astria Health’s situation but said the COVID-19 pandemic exposed the importance of rural hospitals and health care systems, especially in executing efforts such as mass vaccinations and COVID-19 testing and treatments for residents.

“It’s really critical to have health care infrastructure and public health infrastructure,” she said.

It remains to be seen how health care organizations will fund vaccine efforts, Barton True said. The emphasis has been on getting people vaccinated quickly. As a result, there hasn’t been a firm system in place to bill for vaccinations and to recover the cost of those vaccinations.

Barton True said she hopes that future COVID-19 relief packages or other federal packages address the issue as providers may not have the means to shoulder the costs much longer.

“It leads to a ton of uncertainty out there,” she said.

Hospitals lost a key revenue source early in the COVID-19 pandemic when they were forced to stop doing elective surgical procedures temporarily. The pandemic has caused some to opt-out of care.

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Barton True notes that emergency room levels are still far from pre-pandemic levels, which could mean a continued financial hit for rural hospitals and health care systems.

“People are seeking care, but they’re not seeking care at the levels they were previously,” she said.

Many hospitals have survived through the pandemic thanks to federal financial support through the CARES Act, the original coronavirus relief package from last spring. Several hospitals, including Astria Toppenish Hospital, also have received loans through the Paycheck Protection Program.

According to bankruptcy documents, Astria Health received $18 million in federal COVID aid between April to June, boosting the bottom line for those months.

“The rural hospitals have been able to stabilize because of federal assistance,” she said.

Rural health care organizations will continue to face ongoing challenges with reimbursement payments for Medicare and Medicaid patients. This is especially an issue for a hospital that has a high percentage of Medicare/Medicaid payers.

There does seem to be interest at the state and federal level to provide avenues for health care systems and hospitals to be financially stable, but what that looks like in the future remains to be seen, Barton True said.

In Astria Health’s case, the critical access designation for Astria Sunnyside Hospital also helps. Critical access hospitals receive “preferential payments” for Medicare and Medicaid patients, which are often higher than the typical payment. Currently, under state law, there is a moratorium on extending new critical access designations.

“It’s not by any means a panacea or get out of jail free card, but in terms of financial stability, it could be helpful,” she said.

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