With no Medicaid expansion, rural Alabama hospitals struggle

If hospitals close, providers fear ‘the economies will stall out and the communities will slowly die’

By: - March 2, 2023 7:01 am
A child get immunized while being held by mother

India Ampah holds her son, Keon Lockhart, 12 months old, as pediatrician Amanda Porro M.D. administers a measles vaccination during a visit to the Miami Children’s Hospital on June 02, 2014 in Miami, Florida. (Joe Raedle/Getty Images)

Dr. Marsha Raulerson, a pediatrician in Escambia County, said that if DW McMillan Memorial Hospital in Brewton closes, the children she treats will suffer. Their parents will, too.  

Raulerson retired six years ago from general pediatrics and is now the sole provider at Lower Alabama Pediatrics, her practice next door to the hospital. She now cares for about 100 children with various special health care needs, such as diabetes, autism, seizure disorder and even liver and heart transplant patients who may have occasional acute problems.

Most of her patients live below the poverty level. About 90% are on Medicaid, she said. Most of their parents do not have insurance. Some live in the Medicaid coverage gap, making between 18% ($4,475) and 100% ($24,860) of the federal poverty rate for a family of three, and unable to qualify for Affordable Care Act subsidies. Others can’t afford to buy commercial health insurance.

Dr. Marsha Raulerson, sole pediatrician at Lower Alabama Pediatrics in Brewton (Courtesy/Dr. Marsha Raulerson)

“But they’re all working,” she said. “A lot of people think, ‘Well, they get Medicaid, they won’t work.’ Well, Medicaid doesn’t pay for food. It doesn’t pay for housing. All it does is pay for your medical care.”

She refers patients to the hospital for all kinds of things that the hospital can provide.

“The hospital is the center of our community,” she said. If the hospital closes, “we will see, I’m afraid, a collapse of the health care that we have in rural Alabama.”

Steve Fischer, CEO of Escambia County Health Care Authority (ECHCA), which oversees DW McMillan Memorial Hospital, said the hospital has been “slightly” profitable in the past, but the hospital is now operating in a negative margin in a “dramatic fashion.” The other hospital under ECHCA, Atmore Community Hospital in Atmore, has had negative margins before, Fischer said, but not to this degree.

DW McMillian Memorial has more cash reserves, but they are losing more money than Atmore Community Hospital. Both hospitals in Escambia County are under threat of closure within the next two years.

These hospitals tend to be the top three or four employers in the county, and if they close, he and Raulerson both fear it would be the end of the community. Fischer said “the economies will stall out and the communities will slowly die.”

“I can tell you that if our hospital closes, I will leave.” Raulerson said. “I will not stay here.”

Many other rural hospitals are struggling as prices rise and COVID relief money disappears.

COVID relief money helped keep rural hospitals whole during the pandemic. But a recent analysis from the Kaiser Family Foundation found that the loss of those funds, along with labor shortages, rising prices and investment losses sunk average operating margins to about 2% between June 2021 and June 2022. Without federal funds, these hospitals would have operated at a -.7% margin. 

The analysis found the challenges are even sharper in states that have not expanded Medicaid, such as Alabama.

Dr. Don Williamson, CEO and president of the Alabama Hospital Association, said that hospitals are in “dire financial condition, and especially rural hospitals.”

“When I talk to rural hospitals, I’m not hearing numbers of 12% to 14% of uninsured,” Williamson said. “I’m hearing 20%. And that’s not everywhere, but I think we can safely say in rural Alabama, you’re looking at somewhere between [one-fifth] and [one-seventh] people who come in and are uninsured.”

Williamson said that the American Rescue Plan Act money the state will allocate will help the hospitals from collapse, but that is a short-term solution.

“[ARPA] allows them to pay vendors short-term. It keeps them open, he said. “While we then, over the course of the next few months, try to close the coverage gap, which then provides them a longer-term solution and a lifeline to stay open.”

By closing the coverage gap, Williamson said won’t have to drive 30 miles or an hour away for services that they may be able to get locally.

“If you have a problem, it’s much easier to get right back in and deal with that problem as opposed to having to drive another hour,” he said.

And for women who don’t have coverage, being able to get delivery services close to home means they’re more likely to be able to access prenatal care in a timely manner. Williamson said it means they will have healthier babies, which will help drop the state’s infant mortality.

Preventable diseases

Raulerson said that she’s been in Escambia County since 1980. She has seen families grow up and said that some of her first patients are now grandparents.

She has seen them get old very fast because they had no access to health care, she said.

There’s one mother in her practice who’s in her late 30s. She is chronically ill and receives disability benefits. She was uninsured from age 19 to age 37. She now has severe chronic lung disease and diabetes.

“And she did not get the care that she needed, when she needed it,” she said.

Now that she has insurance through disability benefits, the state is probably spending more money now than they would have if she had Medicaid in the previous 20 years, Raulerson said.

In Escambia County, about 3,500 people are uninsured, or 9.5% of the county population.  Over half would qualify for insurance if the state closed the coverage gap, according to Cover Alabama Coalition. 17% are estimated to have medical debt.

Raulerson said her community needs more mental health services. Medicaid expansion, she said, would give people in the community more opportunity to get preventative care.  

“If they had a primary care doctor, they would get screenings. They get their blood sugar check. They would get their mammograms. They would get their colonoscopy if they had insurance instead of waiting until they were really sick.”


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Alander Rocha
Alander Rocha

Alander Rocha is a journalist based in Montgomery, and he reports on government, policy and healthcare. He previously worked for the Red & Black, Georgia's student newspaper, and Kaiser Health News, where he covered community health workers' successful efforts to vaccinate refugees in an Atlanta suburb. He is a Tulane and Georgia alumnus with a two-year stint in the U.S. Peace Corps.