RURAL HEALTH thumb stitch.jpg
Dr. Peter Stamas at Flambeau Hospital in Park Falls sews stitches into the thumb of a man who was injured at home in a woodworking accident. CRAIG SCHREINER -- State Journal

Hospitals in Edgerton, Friendship, Hillsboro, Osceola, Sparta and Stanley have dropped their nursing homes in recent years.

In Edgerton, Friendship and Shawano, hospitals have given up home health care services.

Mental health units can no longer be found at hospitals in Boscobel and Darlington.

Babies aren't delivered routinely anymore at hospitals in Durand, Merrill, Park Falls and Sparta.

The facilities are among Wisconsin's 59 "critical access" hospitals, a federal designation for rural hospitals that brings more money from Medicare, the federal health plan for seniors and the disabled.

Only five states have more of these hospitals.

The program, which started in 1999, has kept many struggling rural hospitals alive, administrators say. But some of the hospitals continue to wrestle with the high cost of delivering medical care to a small number of patients.

A 10 percent cut to rural hospitals this year in Medicaid, the state-federal health plan for the poor, brings an additional challenge. Hospital administrators are pushing for a tax that would bring in extra federal money to offset the state cut.

‘Stop the bleeding'

Since 2001, several rural hospitals have cut services that typically lose money, according to an analysis of a Wisconsin Hospital Association database by the Rural Wisconsin Health Cooperative and the Wisconsin State Journal.

"You can afford one cost center that loses money," said Jeremy Normington, chief executive officer of Moundview Hospital in Friendship. "But if you have two or three, you have to stop the bleeding."

After Moundview lost $2.3 million in 2008, Normington got rid of the nursing home and home health and ambulance services. A nearby nursing home and other home health agencies took some patients, and local governments are paying for ambulances.

Moundview lost $400,000 last year and expects to lose $200,000 this year, Normington said. It could be in the black by 2012, he said.

Medicare pays critical access hospitals rates up to 20 percent higher than other hospitals in Wisconsin, said Rich Donkle, finance director of the rural health cooperative, a Sauk City-based group of 35 rural hospitals.

Medicare accounts for about half of the budgets at most rural hospitals, compared to a third at urban hospitals, so the boost makes a big difference, Donkle said.

"It provides a level of stability," he said.

But nursing homes, home health care and mental health services don't qualify for the higher payments, Donkle said. Delivering babies rarely brings the bonuses because few people on Medicare give birth.

Without the bonuses, those services frequently lose money, Donkle said.

Forced to cut services

Boscobel Area Health Care shut down its mental health unit in 2008 because it was losing $300,000 a year, said John Russell, administrator of the hospital, which lost $700,000 overall that year.

Still, the hospital lost more than $1 million last year, forcing layoffs and a wage freeze.

"In rural areas, we have to be very careful about our financial resources," Russell said.

Memorial Hospital of Lafayette County in Darlington dropped its mental health unit in 2004, said Sherry Kudronowicz, administrator.

The hospital started sending mental health patients to Boscobel. Now that the Boscobel unit is gone, patients must be taken - at considerable expense - to state institutions in Madison or Winnebago, Kudronowicz said.

Memorial, despite losing $46,000 last year, may try to be recertified this year to take mental health patients so it can stop paying to transport them elsewhere, she said.

Edgerton Hospital sold its money-losing nursing home in 2007 so it could prepare to build a new hospital, said Jim Pernau, chief executive officer. Construction is expected to start soon on the $26 million hospital, which will replace a facility built in 1923.

The hospital also shifted its home health and Meals on Wheels programs to an independent group that took over the nursing home, Pernau said.

State Journal reporter Nick Heynen contributed to this story.

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Wisconsin State Journal reporter David Wahlberg is undertaking a special project this year examining rural health care challenges. Installments on related issues will follow in the coming months. Joining Wahlberg on the project is State Journal photographer Craig Schreiner.

To contact them, e-mail dwahlberg@madison.com or cschreiner@madison.com or call Wahlberg at 608-252-6125.

The project is partly supported by the nonprofit, nonpartisan Kaiser Family Foundation, which awarded a fellowship to Wahlberg.