The pulse of rural health care: Johnson listens to local hospital officials’ concerns

The pulse of rural health care: Johnson listens to local hospital officials' concerns Sen. Tim Johnson, at right, listens as John Paulson, CEO of Sioux Valley Vermillion Hospital, describes some of the financial challenges caused by cuts in Medicare payments. "We have a $4 trillion surplus, with $2 trillion over what we would need for Social Security," Johnson said. Rural hospitals face both rising expenses and falling revenues, he added. by David Lias Sen. Tim Johnson told officials from Sioux Valley Vermillion Hospital that his recent tours of smaller, rural hospitals have uncovered unique challenges in different communities.

"But there are also some unifying themes that we have to deal with," he said.

Johnson met with local hospital officials July 22, and briefly toured the facilities here.

"It strikes me that a key problem that we have, that I hear the most about anyway, is the Balanced Budget '97 (Medicare) reimbursement adjustments," Johnson said. "As you know, the savings that come from those adjustments have run over twice over what is projected."

South Dakota health providers will receive an estimated $171 million less in Medicare revenue from 1998-2002. Smaller hospitals are hit hardest because of their small patient loads and high rate of elderly patients.

"I am concerned that we don't become a state of 10 full-service hospitals and the rest a bunch of emergency rooms," Johnson said.

It's ironic, he added, that while rural hospitals are facing financial challenges, Congress is arguing about budget surpluses.

"You think that would ease the pain in some of these areas. There has been talk about some tax cuts, and I'd like to see tax relief, too," Johnson said, "but it has to be in context of re-visiting some of these issues, like the Medicare 1997 adjustments. Otherwise we're going to see some (hospital) doors closed in the state."

John Paulson, CEO of the Sioux Valley Vermillion Hospital, said about 60 percent of the hospital's caseload are Medicaid patients. The overall reduction in Medicare payments in the last year has been about 10 percent.

Johnson contends that the federal government can afford higher Medicare reimbursements given 10-year budget projections.

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