Guadalupe County Hospital wasn't a pretty sight in late February 1993.
Not only wasn't the 16-bed facility in Santa Rosa, N.M., prepared for the simplest of surgeries, but this remote hospital just off historic U.S. Route 66 wouldn't even have made a good rest stop for tourists.
Missing from the hospital was everything from medical supplies and examination tables to light bulbs and toilet paper.
"The town may have had a building, but they certainly no longer had a hospital," said Pamela Galbraith, administrator for medical services at Albuquerque, N.M.-based University Hospital, which later launched a rescue effort for the tiny county facility.
Guadalupe County Hospital was mired in legal and financial troubles that arose after the facility was leased to a for-profit corporation owned by the town's only physician, Charles Young.
Young, also the hospital's administrator, had grown frustrated and angry at the lack of a backup physician. So on Feb. 23, 1993, he packed up nearly all the hospital's equipment and supplies, saying they belonged to him, and carted them away. Eight months later he was practicing in Wyoming.
Guadalupe County residents have spent the past two years piecing together a healthcare system from the shambles Young left behind.
The mess at Guadalupe County Hospital may be an extreme case, but it depicts the difficulty of small communities across the West. Physicians are scarce in those parts, and providing basic healthcare is a continuing challenge. For hospitals in remote areas such as Guadalupe County, it's sometimes a struggle simply to survive. But an increasing number of rural communities are recognizing the vital role their area hospitals play.
These facilities, called "frontier hospitals" by the National Rural Health Association and others, serve some 2.2 million people in communities primarily west of the Missouri River in the Great Plains, Mountain and Southwest states, which encompass half the nation's land. They are located in secluded areas with a population density of fewer than six people per square mile. There are 380 such "frontier counties" in the nation.
Frontier hospitals are hardly attractive partners for hospital management companies or managed-care plans in search of enrollees. Nearly 55% of such hospitals are owned by the federal government with the remainder operated by not-for-profit secular organizations. Rarely are these facilities held by investor-owned hospital chains.
"If there isn't the population base to sustain the healthcare system, even the most creative and stellar management can only go so far," said Jack Geller, director of the Center for Rural Health at the University of North Dakota School of Medicine in Grand Forks.
When frontier hospitals set out to integrate, it's not as simple as the often-seen school consolidations in rural areas hit hard by population migration.
"The principal comes to the school board and says, `We had six kids graduate from high school last year, so we're going to merge with another school system.' Now some think they can do that with hospitals," Geller said. "However, there's one big difference: Public schools are mandated to provide certain services; hospitals are not."
Frontier hospitals are a subgroup of the larger category of rural hospitals- acute-care facilities located outside a metropolitan statistical area. Of the nation's 2,460 rural hospitals, 953, or about 39%, have fewer than 50 beds.
Despite their challenges, rural hospitals have largely reversed the decline they experienced in the late 1980s. A record 46 closed in 1988. Rural hospital closures dropped 9% in 1993, to 19, compared with 21 in 1992, according to the American Hospital Association's annual closure list.
Improved Medicare and Medicaid reimbursements have helped rural facilities survive, but frontier hospitals need more than improved reimbursement to ensure their future.
"When it comes to frontier hospitals, if your average daily census is one, what the hell difference does it make what your Medicare and Medicaid reimbursement is?" Geller said.
With a population of 4,150-1.4 people per square mile-in its service area, patients aren't waiting in line to use Guadalupe County Hospital. Occupancy averaged 12% last year.
Guadalupe also is the second-poorest county in New Mexico, a state that ranks last in terms of access to healthcare, according to U.S. Census Bureau figures.
A few truck stops, acres of cattle-grazing land and 120 miles of Interstate 40 are all that stand between Guadalupe County Hospital and the next largest healthcare provider, 318-bed University Hospital in Albuquerque.
After Young's abrupt departure, the hospital's assets dropped to $44,514 at the end of 1993 from $702,334 in 1992, according to financial figures from HCIA, a Baltimore-based healthcare information company. The hospital's operations also suffered during the last years of Young's leadership. While the hospital was never highly profitable, it had broken even in 1991 before its profit margin fell into the red by more than 20% in 1992 and 1993.
Young told Modern Healthcare that the federal government investigated him during his time as administrator and physician at Guadalupe County Hospital. He said he was accused of fraudulent Medicare billing but was never charged.
"Some disgruntled employees spread some rumors," Young said in a telephone interview from Lander Valley Medical Center in Lander, Wyo., where he said he is practicing emergency medicine. "(Federal agents) investigated, but after two or three years they found nothing." Young also is working 100 miles southeast of Lander at 60-bed Memorial Hospital of Carbon County in Rawlins, Wyo.
Young said that he continued to see patients at a downtown Santa Rosa office for a "few months" after leaving the hospital and that he didn't actually leave Santa Rosa until early 1994. However, Young was certified Oct. 4, 1993, by the Wyoming medical board, state records indicate.
Whatever the case, the hospital was foundering under Young's leadership. It lost $353,000 on net revenues of $1 million in 1992 and $147,000 on net revenues of $690,000 the next year, according to HCIA.
Faced with these challenges, the Guadalupe County Commission pleaded with then Gov. Bruce King for help, and University Hospital stepped in, Galbraith said. Unlike hospital management companies, New Mexico's only academic medical center doesn't enter into long-term contracts with rural hospitals.
"We don't want to own the community's problems," Galbraith said.
Instead, staff of University Hospital and the University of New Mexico medical school serve as administrative and medical "SWAT" teams. King's administration came through with a $90,000 emergency grant to help re-equip the hospital.
The money from the state and the county's decision to reclaim control of the hospital was a start, but other crucial judgments had to be made by the citizens in the community.
"I have three children, and my husband and I run a restaurant here," said Christina Campos, a volunteer who led a campaign for a property tax levy designed to support the hospital. "We didn't want our children to have to travel 100 miles or more for healthcare."
During the latter years of Young's era, the community's view of local healthcare became extremely negative. A straw poll taken in March 1993 showed a tax levy to support the hospital would have failed miserably, so Campos and others mounted a public relations blitz.
"I kept thinking of one of my children lying in the street after an accident, so that's the story I told," Campos said of the five-month campaign.
The levy passed by a 3-1 margin in July 1993. The tax, which costs the average homeowner about $70 a year, supports hospital maintenance and operations, bringing in about $200,000 annually. About 25% of the levy is kept in a reserve fund for future emergencies.
In the first year of its crisis management, Galbraith and staff wrote personnel and procedural manuals, set up an accounting system, provided medical physician backups and began to hire staff.
Sacrifice was a key test for the 30 full-time employees in the first month after the county took over the hospital.
"There wasn't money to pay employees for three weeks, and they had to wait a couple months before health insurance coverage resumed," said Galbraith, who drove to Santa Rosa at least once a week.
For rural healthcare to succeed, there has to be some sort of community-focused effort or a community-based network, said John Supplitt, director of the AHA's section for small or rural hospitals.
"A lot of community support is critical for whatever system of infrastructure they think is appropriate," Supplitt said. "If the community deems that something less than inpatient care is necessary, then that's what they should pursue."
In Santa Rosa, Guadalupe County Hospital planned to survive on its emergency room and a clinic. The hospital's average daily census is two. The emergency room capacities are necessary because of the lack of providers in the area. Thousands of motorists daily travel Interstate 40, so 24-hour trauma care is not a luxury.
Nearly 30% of the hospital's emergency patients are travelers. Several thousand tourists each year visit Route 66 attractions and the "Blue Hole," an 80-foot-deep natural spring and scuba diving site less than five miles away from the hospital.
The hospital also was paramount for Santa Rosa to remain economically viable.
"We wanted the hospital to be ours, and ours from now on," said Santa Rosa Mayor Joe Trujillo.
For the sake of Santa Rosa's future, help from the community came from all directions.
Galbraith, whose university duties limited her stays in Santa Rosa, maintained constant contact with Aaron Gallegos, a high school graduate who was appointed interim hospital administrator. As Young's assistant for several years, Gallegos had the best knowledge of Santa Rosa's books.
On July 1, 1993, Galbraith recruited Randal Brown, M.D., a Santa Rosa native, as the hospital's full-time physician. With Brown on board, a clinic was opened in the hospital's basement.
After passage of the property tax, Campos, who has a bachelor's degree in economics from the University of New Mexico, was paid $250 a month for her financial services to the hospital. Today, she's the facility's finance officer, earning $25,000 a year.
Gallegos was encouraged to go to college. The 28-year-old is now a full-time student finishing work on his undergraduate degree and plans to go on to medical school next year.
By February 1994, the hospital hired Rose Contreras-Taylor as a full-time administrator after University Hospital assisted in facilitating a national search. Contreras-Taylor had been quality improvement coordinator at University Hospital.
In her brief tenure, Contreras-Taylor has been successful in attaining thousands of dollars in grants and recruiting key hospital personnel. A full-time primary-care resident from UNM medical school now provides backup services for Brown.
"We rotate primary-care residents into Santa Rosa for eight weeks at a time," Galbraith said. "It provides another physician to an underserved area while exposing a resident to rural medicine."
Attracting physicians to rural areas is a difficult proposition for hospitals across the country.
Nationally, just 1.5% of 15,000 graduating medical students prefer practicing in rural America, according to a 1990 survey by the Association of American Medical Colleges.
Cando, N.D., was one of those rural towns in need of a doctor. Towner County Memorial Hospital, a 22-bed facility, is just 40 miles from the Canadian border in Cando, a burg in the northeast part of North Dakota with a population of 1,500.
A director of one of the University of North Dakota's four family practice residency programs decided to return to Towner County Memorial three years ago after leaving the hospital in the early 1980s to join UND's program in Minot, N.D. Along with David Rinn, M.D., came another family practice physician and two physician's assistants.
"Here you have a hospital that was about to close its doors and they are delivering babies where they hadn't delivered babies in years," UND's Geller said.
Towner County Memorial now has a balance sheet that would be the envy of many hospitals several times its size. "We will be in the black this year for the third consecutive year after seven straight years of losing money," said Timothy Tracy, the hospital's administrator.
Its profit margin hovers around 10%. In 1994, for example, Towner County Memorial had net income of $314,000 on net revenues of $3.5 million.
It's no coincidence that the hospital's dramatic profit growth came with Rinn three years ago. Rinn answered a call for help and saw the chance to change the direction of healthcare in a community.
"Physicians having a community commitment is the key," Tracy said. "They have an ability to look for the bigger picture."
The addition of another physician could help Guadalupe County Hospital break even this year.
"I feel like we are now on a road of stabilization," said Administrator Contreras-Taylor.
But frontier hospitals still can be a heartbeat away from financial trouble. "They are typically in one-doc towns, and even though things may be good now, you are one car accident or one retirement from closing shop," Geller said.
Even if physicians decide to practice at a frontier hospital, they are usually far from backup support. "If you have one serious accident, it's a long way to a category-one trauma center," Geller said.
In many cases, frontier hospitals lacking resources need to be flexible and creative. In Guadalupe County, for example, the intersection of Park Drive and Ninth Street becomes a helipad when an emergency case has a short time to get to a tertiary facility in Albuquerque.
But it was a stable and improved healthcare system that helped convince the state of New Mexico to choose Guadalupe County as a site for a $37 million medium-security prison. The 500-bed facility will employ some 400 people.
"We proved that we can make a difference," Campos said. "It's hard work, but it can be done."
University Hospital is using the county as the model for two other New Mexico communities with struggling hospitals-in Truth or Consequences, with Sierra Vista Hospital, once owned by Adventist Health System, and in Deming, where Mimbres Memorial Hospital canceled its management contract with Dallas-based Epic Healthcare Services.
"We don't hop in a bus and say, `We're here to save you,"' Galbraith said. "We come in at an invitation."
Remote rural facilities are being tested by a host of problems, including a lack of providers and patients
FRONTIER HOSPITALS NEED MORE THAN IMPROVED REIMBURSEMENT TO ENSURE THEIR FUTURE.