Rural hospitals – and healthcare – are in deep trouble.

With the unwinding of Medicaid post-COVID emergency, rural healthcare is falling deeper into financial trouble.

Consulting form Chartis just published their review of rural healthcare…among the findings

The unwinding issue is exacerbating problems in states that failed to expand Medicaid…the vast majority of which are those with the most hospitals in financial distress.  Simply put – they have to deliver way more healthcare to people without health insurance.


Across the 10 remaining non-expansion states (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming), the percentage of facilities with a negative operating margin increased year-over-year from 51% to 55%. These states are home to more than 600 rural hospitals…Several of these states are among the most severely affected by hospital closures and a loss of access to care.

The percentage of America’s rural hospitals operating in the red jumped from 43% to 50% in the last 12 months.

418 rural hospitals are “vulnerable to closure” according to a new, expanded
statistical analysis.

Healthcare deserts are a huge problem for rural America, especially in areas with lots of extractive industries (mining, energy, agriculture. Workers in those industries are much more likely to suffer severe occupational injuries, injuries that benefit greatly from care delivered in the “golden hour”.

What does this mean for you?

Not expanding Medicaid is killing rural healthcare.


Signs of the coming apocalypse

Medicare is slashing what it pays physicians, an annual event that – till now – was almost always rejected by Congress.

That will reduce old folks’ access to care, cut workers’ comp fee schedules, and likely lead to more provider consolidation. 

This from Becker’s:

In its 2024 Physician Fee Schedule Final Rule released Nov. 2, CMS reduced overall physician pay by 1.25% and updated the Medicare conversion factor to $32.74, a 3.4% decrease from last year.

Nope, a fix wasn’t in any of the “continuing resolutions” Congress passed last year and earlier in January (“CRs” are a stop-gap, emergency funding step more often seen in desperately poor banana republics than in the “greatest nation in the world.)

As a result, docs’ pay will be cut about 3 1/2%…and they are none too happy about it. (Read this for details on potential implications)

Okay that’s bad, right?

Not as bad as what’s coming.

Reminder – if Congress doesn’t pass a budget – in exactly one month – all Federal agenciesincluding Medicare, the VA, Defense, the FAA… face budget cuts. Weapons procurement, care for veterans, agriculture inspections, airplane safety inspections (this isn’t a problem, right??) are just a few.

Remember way back (as in two years ago) when Congress’ wait-till-the-last-minute-to-get-stuff-done made us all nuts…if we knew then how dysfunctional the House would be now we’d have been quite happy for what we did have.

Yep, Republicans in the House of Representatives’ refused to even vote on an immigration reform bill – THE hot issue in Washington and around the country – a bill that gave them everything they wanted.

House GOP – Yay, we finally got the soccer ball!  Let’s play! Wait…how do you play? I dunno…you know?  Nope – you? Nuh-uh…you? No clue…you? Uh…I thought it had pointy ends…Someone pick it up…NO way dude! Not me…

What does this mean for you?
To quote HL Mencken, you get the government you deserve, and you deserve to get it good and hard.

PS – Over the lastly 20 years I’ve written a lot about the incredibly screwed-up Medicare reimbursement  process…


Predictions for healthcare in 2024

Some of you know Jay Stith – he’s been working with HSA for half a decade now, heading up data analytics and research. Jay’s brilliant, has a great dry wit, and most of all very insightful.

He sees stuff – others – including me – don’t.

So, I asked Jay to make his predictions for healthcare in 2024…lest the work comp folks stop reading here, remember workers’ comp is the flea on the tail of the healthcare elephant.

Outside of employment, the biggest single factor affecting workers’ comp is healthcare – hands down.

  1. Hospital/ Health System M&A will ramp up in a big way leading to even more consolidation around the country.
    1. M&A dropped dramatically during COVID so there is an element of catch-up on top of a rapidly changing healthcare industry, financially distressed hospitals/health systems offering themselves as prime takeover candidates, and potentially dropping interest rates all point toward high levels of M&A activity.
  2. And…Facility fees will continue to be the elephant stomping around the room. Remaining high and potentially going higher all while limited efforts are made to curtail them.
    1. A next step to prediction #1 – as consolidation often means high prices. Little activity has occurred to combat facility fees so far and with sexier issues like AI monopolizing meetings I don’t see meaningful action broadly coming.
  3. Staffing shortages will keep already high labor costs high – looking at nurses in particular.
      1. The thousands of physicians and nurses entering the workforce lags the number of physicians who are retiring or simply exiting the industry. This decline coupled with the aging US population is exacerbating the already critical problem. We are, and have been, under-supplied with nurses across the healthcare landscape and between structural issues like not enough nurse education faculty and the median age of nurses >50 this issue is unlikely to change.
  4. Human-caused climate change will disrupt even more businesses with policy progress being slow and insufficient.
    1. We don’t know what we don’t know – climate-related problems are impacting a wide range of business and employee needs. In addition to the obvious employee-injury issues associated with climate change, disruptions to care access, employee-personal-life problems (e.g. damage to home), and climate migration make climate-associated changes more difficult to model and properly account for.
    2. As if we needed more proof, here’s what’s happening in California..
  5. The AI arms race will continue with companies everywhere announcing new AI tools for various business segments BUT true internal buy-in will still be far away as the tools will underwhelm managers dreams for headache-reduction.
    1. Managers are dreaming about the volume of tasks that AI will be able to effectively handle in a fraction of the time while producing higher quality work than their current teams. As companies learn how difficult properly training an AI tool is and how much time/resources are required to make even marginal gains, people will get frustrated about having over-promised and/or having to deal with poorly functioning AI tools – e.g. a bad chatbot or an internal system lacking proper training on a costly outlier situation.
    2. AI and technology improvements will dominate the headlines and capex allocations BUT customer service will remain more correlated to client satisfaction.
    3. Healthcare and insurance have changed a lot over the decades but as technology has gotten fancier and the industry more complex, high quality customer service has remained the top-rated factor when assessing a successful vendor-client relationship… and it will not change this year.

What does this mean for you?

Consolidation = higher facility costs.

Staffing shortages = higher facility costs.

Human-caused climate change = BIG problem.

AI ≠ panacea.


Hospitals are…

a) in desperate financial shape, on the verge of bankruptcy…

b) doing quite well thank you, enjoying very healthy profits…

c) both.

The answer is…C.

For-profits – HCA, Tenet et al are doing great, while (most/many) not-for-profits are really struggling, with some on the verge of/going into bankruptcy.


Very briefly, for-profits (there’s lots of nuance here, but generally);

  • don’t take Medicaid patients,
  • have very strong orthopedic and cardiac surgery practices which are very profitable;
  • do their best to avoid/transfer/not care for the uninsured.


  • include inner-city and rural facilities that must take Medicaid and
  • serve as primary care providers for the indigent and uninsured and
  • deliver lots of babies and provide general med/surgical services which are marginally profitable

What does this mean for you?

Hospitals of all types are looking to maximize revenue, especially from very profitable payer types.

Is that you?




Optum employs(?) more doctors than any other organization

The giant subsidiary of United Healthcare employs [>]90,000 MDs and 40,000 more advanced practice clinicians – far more than any other entity.

That’s more than one out of every ten physicians, and a far higher percentage of practicing MDs.

While that’s pretty amazing, its just one of the many investors, healthplans, private equity firms, large healthcare systems, and insurers snapping up all manner of healthcare providers.

In fact, almost three-quarters of all physicians are employees of companies or healthcare systems/hospitals – not members of physician-owned practices.

As with everything in healthcare, location makes a big difference.

One of the biggest drivers has been Optum’s acquisitions, which included Kelsey Seybold, a very large practice in Texas…Optum reportedly paid $2.2 billion for the business.  And, that happened AFTER the time period in the graph.

What does this mean for you?

Your healthcare will be driven by investors’ goals.

note – Optum’s communications folks asked me to publish a correction, because not all of the 90k docs are “employees”…I asked how many of those 90k docs are “employees”; Optum’s reply was “We don’t break out the numbers because we focus on the total number who serve our risk-based patients.”

I’m quite sure Optum knows the number. why they won’t release it is a mystery.

I also asked – twice – whether the “physicians who contract directly with Optum” (which make up some/part of the 90k docs):

  • exclusively contract with Optum,
  • are allowed to contract directly with other payers, and/or
  • is Optum the contracting intermediary?.

I didn’t get an answer.

So, all I can tell you, dear reader, is Optum directly employs ≤ 89,999 physicians, and may or may not allow those “non-employed” physicians to contract with other payers.


Good news Monday starts with this from the Economist, a beacon of objectivity (reformatted for clarity):

a steady stream of better-than-expected data has left analysts scrambling to lift their forecasts.

    • New orders for manufacturing firms reached their highest in nine months in July.
    • Retail sales were perky last month, too, with consumers splurging on everything from restaurant meals to online shopping and clothing to sporting goods.
    • The construction industry has also been buoyant, supported by a rebound in homebuilding.
    • the labour market… has remained hot, making it relatively easy for people to find work at decent wages.
    • The total number of jobs in America has been growing faster than the working-age population, helping to keep the unemployment rate at 3.5%, just shy of a five-decade low.

Oh, and those naysayers, remember they are the ones who’ve been doomsaying a recession is imminent…for more than two years.

“Eventually” that may happen – and “eventually” my granddaughter may have grandkids…

Oh, and our economy has far outperformed the rest of the developed world over the last few years.

One measure of a country is how it cares for the less fortunate…thanks to recent changes in Medicaid thousands of homeless people are now getting primary care, which is:

A) the right thing to do and

B) saves a boatload of dollars as these homeless folks are far less likely to go to the ER which costs a shipload more than getting basic primary care.

What does this mean for you?

Don’t get caught up in all the negativity…workers are doing better and better, jobs are plentiful, we are improving the lives of the less fortunate…and the US is leading the world.


Awful news Friday

I wrote the post below 4 years ago…and I’m heartbroken that it’s truer now than it was back then.

Our daughter went to school near Lewiston…I’m heartened that she graduated years ago and guilt-ridden that other parents and family are terrified their kids and family members may be the next victims.

It’s easy – and completely wrong – to say it’s all random.  It isn’t.

At all.

The epidemic of death by firearm is uniquely American.

Take responsibility.

  • Demand red flag warnings.
  • Demand assault weapon bans
  • Demand universal background checks. 

Or accept the blame.

Guns and public health

Guns are a major public health and safety problem. Guns are associated with tens of thousands of deaths every year, most preventable.

And we Americans are among the world leaders in death via firearm.

Before you make any assumptions – I own guns. I hunt – although I’m a pretty poor hunter.

My dad taught me to shoot, and handle firearms, and gun safety. Among the guns I own are his service rifle – a 1903 Springfield – from WW2 and the revolver he carried while flying in B-17s over Europe. They mean a lot to me, and one day I’ll pass them down to my kids.

A couple key factoids that are worth considering.

  1.  Most Americans – and most Republicans – want background checks and “red flag” laws.  And most Americans want stricter control of gun sales in general.

2. Firearms are used to commit far more suicides than homicides.

3.  People who attempt suicide with a gun are much more likely to die than those who use other means.

4. There’s a strong correlation between higher rates of gun ownership and higher suicide rates.

5.  Lastly, every day 65 people use guns to kill themselves.

Guns are a major public health concern, yet no other public health menace gets the same public support.  As a gun owner, I’m deeply troubled by the willingness of some to advocate positions that will get more guns into more hands – which will lead to more unnecessary tragedies.

What does this mean for you?

The data is clear – people want stricter gun laws – and for very good reason


COVID vaccines’ impact on newborns

If pregnant moms are vaccinated their babies were less likely to die, get very sick, or end up in the NICU (neonatal ICU) than unvaccinated mom’s babies…

That’s the findings from a very large Canadian study just published.

But wait…there’s more!

during their first 6 months (longer durations were not part of this initial study) babies from vaccinated moms were much less likely to get COVID than babies from unvaccinated mothers.

And, there was NO evidence that babies may have been adversely affected by the vaccinequoting one of the researchers:

The study “provides further reassurance on the safety of maternal mRNA COVID-19 vaccination during all trimesters of pregnancy for newborns and infants,”

Details on the study are here.

Maternal Covid-19 vaccination offers infants immunity for up to 6 months


What does this mean for you?

Yes, there are some potential limitations, but this is yet more evidence that vaccinations save lives.

If you want to challenge the study, provide credible citations to support your statements.  Anything from Robert Kennedy does not meet that standard.


Yay North Carolina!

The Tar Heel State is the latest to expand access to Medicaid, a move that will drastically improve the health of 600,000 (!!!) North Carolinians and financial stability of dozens of hospitals and hundreds of other care providers.

40 states have now expanded Medicaid under the Affordable Care Act (aka Obamacare)…holdouts include Florida, Texas, Mississippi, Alabama, Missouri…

Think this doesn’t impact workers comp?

Think again.

States where work comp facility costs have risen the most – courtesy WCRI.

This from Captain Obvious – Hospitals in states that failed to expand Medicaid are using workers’ comp as a financial lifeline.

What does this mean for you??

Failing to expand Medicaid is unconscionable.  It greatly improves the health of babies, moms, kids, and older folks – at very, very little cost to taxpayers. 

The blatant hypocrisy of politicians claiming to respect life while blocking Medicaid expansion is disgusting.


Medical debt is crushing Americans

One out of three adults has medical debt. 

For many, this has a major impact on daily life…

Medical debt can be a huge obstacle, preventing families from buying a home, purchasing or leasing a vehicle, even paying for college for their kids.

That’s because credit bureaus include medical debt in their scoring algorithms. 

Looks like that will be changing…

From the Vice President:

The Consumer Financial Protection Bureau will propose a new rule to make clear that medical debt cannot impact the credit scores of the American people.  Once this rule is final, it will mean, one, that

consumer credit reports will not include medical debt and, two, that

creditors will not be able to use medical debt to determine a person’s eligibility for credit. 

Almost 2/3rds of those with medical debt had insurance when they began treatment...a quarter of those had their claims denied.

What does this mean for you?

Help is on the way.