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Another rural hospital succumbs to mounting financial pressures


By Bob Herman
Posted: August 25, 2014 - 3:15 pm ET
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Rural hospitals are about to lose another comrade.

Crittenden Regional Hospital, a 142-bed facility in West Memphis, Ark., said Monday that it has stopped admitting patients and will permanently shut down by Sept. 7.

The hospital has been facing a host of financial and operational challenges. It lost almost $3 million on $55 million in revenue in 2012, according to Crittenden Regional's latest Form 990 (PDF). That came one year after the hospital lost $1.3 million on $57 million in revenue. Reimbursement cuts and sharp declines in patient volumes led to those troubles.

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Also, hospital officials said outgoing physicians and two fires negatively affected its outlook. Most recently, a fire kept the hospital closed for more than six weeks. “Even the expansion of Medicaid in Arkansas and impressive enrollment rates in the Private Option by citizens in the service area were not enough to overcome these issues,” the hospital said in announcing its closing. Rather than merely expand Medicaid, Arkansas had opted for the so-called private option that provides residents with funds to find private insurance.

More than two dozen small, rural hospitals have closed since 2013. The plight of rural hospitals prompted the mayor of a small North Carolina town this summer to walk 273 miles, from the site of his town's closed hospital to Washington, and advocate for legislation to protect small facilities.

Crittenden Regional was set to receive short-term financial help. Local media reports said county voters overwhelmingly approved a 1% sales tax increase, which would have put about $30 million in the hospital's coffers after five years. The tax is not expected to be collected now.

Hospital executives and the board said the tax hike would not have been enough. Crittenden Regional, which has a loose relationship with Methodist Le Bonheur Healthcare in Memphis, Tenn., also looked for a system buyer, but it received no bites. Methodist officials were not immediately available for comment.

“Crittenden Regional has been home to many dedicated, talented physicians and employees, who have served patients and their families here in Crittenden County for the past 60 years,” hospital CEO Gene Cashman said in a statement. “We are grateful for their service and will make every effort to help them find new employment close to home.”

Follow Bob Herman on Twitter: @MHbherman


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