A cash-strapped hospital in rural South Carolina has found an unusual way to keep its doors open — by adding a unit to treat prisoners.
(Bloomberg) — A cash-strapped hospital in rural South Carolina has found an unusual way to keep its doors open — by adding a unit to treat prisoners.
Medical University of South Carolina’s Chester Medical Center will open a 36-bed ward next month to house state inmates needing hospitalization, an arrangement that brings much-needed revenue to a facility that was struggling financially even before the pandemic.
The agreement with the state’s corrections department underscores the pressures facing thousands of US hospitals, especially after costs soared during the pandemic. Rural hospitals in particular have limited options, and the numbers are grim. More than 600 rural hospitals — about 30% of the total — are at risk of closing in the near future, according to the Center for Healthcare Quality and Payment Reform.
That means looking at unorthodox solutions like Chester has, said Colin McCulloch, a former hospital executive who now advises on health-care mergers at Epstein Becker Green in Washington. “That’s innovative, that’s creative and that’s preserving their mission, because there are not a lot of partnerships that a hospital can do,” McCulloch said.
Chester, the county seat, is about a 175-mile (282 kilometers) drive northwest from Charleston, the state’s biggest city. Though its historic downtown draws visitors, the median household income in the county of 32,000 people is well below the national average.
Seventy percent of Chester’s patients are insured through Medicare and Medicaid, and those payments don’t quite cover their cost of care, said Dr. Patrick Cawley, the chief executive officer of MUSC Health, the Charleston-based academic system that owns Chester and 13 other hospitals. South Carolina’s department of corrections reimburses at rates consistent with the state’s health plan. It also paid for the $3.3 million overhaul of the previously-unused wing, including security measures like bars on the windows.
“This will help us keep the hospital going,” Cawley said. The higher payment for inmate care “makes all the difference in the world. We know it’s at least covering our costs.”
Losing Money
MUSC took over the 82-bed Chester hospital and three others in early 2019 from national chain Community Health Systems, which was selling off lower-performing hospitals. The hospital was losing some money, and many potential buyers would have walked away, said Cawley. But MUSC had done some work with rural hospitals and wanted to add facilities where it could train staff. Even knowing the significant roadblocks, “we thought we could do it,” he said.
MUSC reckoned that as part of an academic hospital system, Chester would have an easier time recruiting doctors, a perennial problem for rural facilities. It made investments, including installing an electronic records system, and began bringing on some needed staff. It merged some functions with those of Lancaster Medical Center, another struggling rural facility it had acquired from Community Health.
Then the pandemic hit, and all the problems already plaguing rural hospitals, including a lack of income and staff, multiplied. Hospitals everywhere had to pause offering more-profitable elective procedures as sicker and more-expensive-to-treat Covid patients streamed into facilities. Soon, surges of sick patients and the exodus of thousands of medical workers forced hospitals to pay travel nurses wages that could soar into the hundreds of dollars an hour.
While the worst days are over, with quieter Covid units and less need for travel nurses, Steven Shill, head of the health-care practice at advisory firm BDO USA, still sees a “quadruple threat,” to community hospitals: Continued supply-chain problems and labor shortfalls, high interest rates and a dearth of access to capital for weaker institutions.
Secure Environment
Meanwhile, the gush of federal aid that kept ailing hospitals afloat through the pandemic, including the $178 billion Provider Relief Fund and $8.5 billion for rural facilities, has ended.
MUSC started talking with South Carolina’s corrections department in early 2020 about how it could help treat sick inmates. At any given time, the department had 30 to 40 prisoners in need of hospital care, Cawley said, and each required two security guards to travel to a hospital.
Cawley expected pushback from the local community but said he didn’t get the opposition he anticipated. “We knew ahead of time that people would be worried,” he said. “All of us were very focused on making sure that people understood this was a secure environment. And it went fine. It actually went fine in the end.”
MUSC is now creating a locked ward at Lancaster hospital for female inmates who need inpatient behavioral care, in another previously-empty wing. It’s scheduled to open midyear.
“You can’t close some of these hospitals, you just cannot do it,” Cawley said. “Almost 30% of people in South Carolina live in rural areas. If you don’t have a hospital, you might have to drive two hours to get to medical care.”
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