Rural hospitals take unique approach to health care for the poor

Even rural hospitals that chose not to enroll in the scaled back GAMC program will lose millions of dollars this year providing charity care for the state's poorest adults. That's because those hospitals are no longer reimbursed.

A growing number of hospitals are taking unusual steps to cut their losses and still provide care for the poorest of the poor.

Tri-County Hospital in Wadena projected it would lose about $850,000 each year providing health care no longer covered by GAMC. This summer, the hospital began an experiment.

Working through Wadena County, the hospital started paying insurance premiums so that about 100 GAMC patients could shift over to the more comprehensive MinnesotaCare insurance program.

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Tri-County Hospital CEO Joel Beiswenger says the premiums cost the hospital about $10 a month per GAMC patient. But he says the move will cut the hospital's annual losses in half.

"For us, it was a very easy cost-benefit decision," he said. "We'll pay $1,000 a month to maintain several thousand dollars a month in potential reimbursements, on the folks that we were going to care for anyway."

At least half a dozen other rural counties and hospitals in Minnesota are doing the same thing.

"The poorest among us are being penalized for what we truly believe is bad policy."

State officials had hoped more hospitals around the state would participate in the revamped program. Rural hospital officials said it was too financially risky.

Only four hospitals -- all in the Twin Cities -- agreed to sign on. Only Hennepin County Medical Center is still accepting GAMC patients. The others have reached their enrollment ceiling.

That leaves about 18,000 GAMC clients across greater Minnesota either getting charity care or, in some cases, no care at all. Beiswenger says it's an expensive way to treat such a vulnerable group.

"The design of the program was to some extent fairly nonsensical to us, because it was forcing people to seek primary care in the most expensive setting -- the hospital emergency room," said Beiswenger. "The poorest among us are being penalized for what we truly believe is bad policy."

At some rural hospitals, the loss of funding has turned into job cuts. North Country Regional Hospital in Bemidji has cut 44 staff positions through attrition this year. Hospital spokeswoman Joy Johnson says that's in direct response to a projected loss of $2.5 million in GAMC reimbursement.

"I think every hospital in the state is doing what we are doing. They're saying, we need to take a closer look at our operations... and we need to become more efficient," she said.

North Country Regional Hospital and Beltrami County are considering the model other rural counties are using -- paying insurance premiums for some of their poorest patients.

Kristi McAllister works for Beltrami County's health and human services department. McAllister says GAMC recipients are typically so poor that even paying a minimal premium of $4 a month on their own is a challenge. Half of them are mentally ill, and a fourth are homeless.

"They're not the working poor, they are THE poor. So the premiums can be an issue for them," said McAllister. "With their movement often, it's hard to keep the mail up to them, so they may not be getting the notices that they need to follow through with the program."

Counties across Minnesota have shifted thousands of GAMC clients onto MinnesotaCare, a program designed for low-income working people. That at least allows the poor in rural Minnesota to see a doctor. The problem is that there's a $10,000 annual cap on coverage. That may not be a good fit for GAMC clients who have a much higher rate of chronic illness.

Many advocates for the poor say the best option is one rejected by Gov. Tim Pawlenty. He opted against converting all GAMC recipients to the federal Medicaid program. It would have brought $1.4 billion in federal money to the state, but would have also required millions in state spending.

The next governor will have the same option. Candidates Mark Dayton, a DFLer, and the IP's Tom Horner say they would opt in to Medicaid. Republican candidate Tom Emmer says he would not.

Michael Scandrett, director of the nonprofit Minnesota Safety Net Coalition, says many people are just waiting to see what happens in November.

"The truth is, regardless of who's elected governor, they're going to have to deal with a very severe state budget deficit," he said. "So there's no question we're going to learn how to serve people that need health care and can't afford to pay it themselves, with less money than we have today."

In the meantime, Scandrett says it's unclear how many GAMC clients are falling through the cracks. He and others are preparing a survey to find out.