By Alan Fisher
Chief Executive Officer
Woodlawn Hospital

Editor’s Note: Alan Fisher is chief executive officer of Woodlawn Hospital, an independent, critical access hospital with clinics in Akron, Argos and Fulton. Fisher started working in health care while in the military and has spent his life in the industry. He is a fellow of the American College of Healthcare Executives and holds a Master of Business Administration. 

Alan Fisher

ROCHESTER — While the Indiana General Assembly debates health care legislation, there is a looming crisis that is going unnoticed. The Center for Healthcare Quality and Payment Reform recently noted that, just in Indiana, “11 hospitals are at risk of closing, and seven of those hospitals are at immediate risk of closing.” Specific hospitals weren’t identified, but a sense of urgency compels me to speak out as the leader of Woodlawn Hospital in Rochester. Unfortunately, my facility is likely one of these at greatest risk.

Woodlawn is an independent, critical access hospital with clinics in Akron, Argos and Fulton. Our operational loss for 2021 was $755,000, but the financial headwinds for us and other hospitals picked up speed last year, leaving us with an estimated loss for 2022 of $6.3 million. Our goal for 2023 is to lose just $1.5 million, even after our implementation of more than $3 million in cost reductions.

There are three main reasons for the current predicament, and they are not unique to Woodlawn. First, with slow population gains in Fulton County and our region, our opportunity for growth is limited. Community leaders are working hard to attract new businesses, but these efforts will take time. Of course, without a local hospital, economic development would be even more difficult.

The second reason is that major insurance companies pay rural hospitals low reimbursement rates and often force patients to seek care far outside our community. These “care redirection” policies seem to be designed for urban areas with many health care and transportation options, but in my community, they often lead to patients delaying needed care. This harms their health and makes it more difficult to keep our doors open.

The third reason is that as many more Hoosiers gained health care coverage through Medicaid and the Healthy Indiana Plan during the pandemic, hospitals have increasingly had to pick up the bill. Indiana hospitals will pay a total of $1.5 billion in 2023 into the Hospital Assessment Fee to fund these programs, and Woodlawn’s portion is growing quickly, rising from just over $2 million in 2020 to $3.2 million this year. It is good that we have the Healthy Indiana Plan for so many without other insurance options, but these Hospital Assessment Fee increases are not sustainable.

Without state help on these two latter issues soon, Woodlawn will face difficult decisions about which services it can still provide to stay afloat. Many hospitals across the country, including some in Indiana, have closed their obstetric units due to low birth rates and inadequate reimbursement. More than 60% of all births at Woodlawn are paid through Medicaid, which covers only 53% of the cost of providing care. We do not want the “maternity deserts” that are growing in our region to become larger, but we must also evaluate closing our own unit, which loses almost $2 million annually.

Currently, there are several bills introduced regarding health care costs that exempt county-owned and rural hospitals like mine. While this is better than being hammered by some of these proposals, simply being left out of that legislation doesn’t help us remain open for the citizens of Fulton County. But with state financial support for hospitals, similar to what is being proposed in states from Michigan to Mississippi, we can keep Woodlawn open as a “maternity oasis” and a cornerstone of the local economy.

Critical access hospitals face a double-edged sword — on one side, our costs are fixed due to minimum staffing requirements for all departments, and on the other side are governmental regulations, which limit our ability to manage expenses. For this reason, legislation for critical access hospitals like ours must be developed in such a way to ensure the continued viability of the organization into the future. We implore legislators to pass bills that would aid rather than hinder our rural facilities and the communities we serve.