A few hours after a rural hospital closed on Friday in Clay County, Democratic state Rep. Gloria Johnson and other Medicaid expansion advocates gathered Friday at a recently closed urban hospital in a show of support.

Tennessee trails only Texas among states with the most rural hospital closures since 2010 and accounts for 10 percent of the nation's total.

The news conference at the now-closed Physicians Regional Medical Center in North Knoxville came at the end of a week that saw the advance of a Republican-backed bill calling on Gov. Bill Lee to seek a federal waiver for block grant funding to pay for Tennessee’s Medicaid program.

A University of Tennessee healthcare policy expert, however, warns that neither approach alone will cure what ails Tennessee’s rural hospitals and the communities they serve.

“Many people say if Tennessee expanded Medicaid, it would stop the bleeding,” said Carole Myers, an associate professor in UT’s College of Nursing and Department of Public Health.

“It would definitely help. But just as no one thing is the cause of why rural hospitals close, no one thing will be the singular reason for them not closing. That said, Medicaid expansion, or some other sustainable, equivalent way to cover uninsured Tennesseans is necessary -- necessary, but not sufficient.”

Myers said Tennessee needs to approach rural healthcare a different way to keep hospitals open for their communities.

Failing Rural Hospitals

Cumberland River Hospital in Celina, Tenn., officially closed at 7 a.m. on Friday. The hospital had been in operation since 1965 and provided emergency and acute care services, home healthcare, outpatient services and rehabilitation care. The hospital also had an eight-bed geriatric psychiatric unit.

According to a January news release announcing the decision to close Cumberland River, the hospital said it has endured years of insufficient revenues from declining reimbursements and lower patient volumes.

“It is with deep regret that we have to make this announcement,” Paul Korth, the hospital’s CEO, said in the statement. “We have worked diligently to avoid closing Cumberland River Hospital but have been unable to successfully arrange any other option.”

Located north of Cookeville near the state's border with Kentucky, Celina has a population of 1,800. The 7,900 residents of Clay County now have to travel to Livingston (18 miles from Celina) or Cookeville (38 miles from Celina) for hospital services.

According to the North Carolina Rural Health Research Program at the University of North Carolina, which follows rural healthcare across the nation, nine rural hospitals in Tennessee had closed between 2010, when the Affordable Care Act became law, and the end of 2018. The list doesn’t include Physicians Regional, which is an urban hospital, or another Tennova Healthcare facility that closed at the end of last year, Lakeway Regional Hospital in Morristown.

Tennessee has seen the second highest number of rural hospital closures among all states, trailing only Texas and accounting for 10 percent of all rural hospital closures in the nation.

State Government’s Response

Johnson and the other Medicaid expansion advocates who gathered at the former emergency room entrance at Physicians Regional on Friday are fighting long, if not impossible political odds.

“We’re here to stand in solidarity with Celina,” Johnson said, adding that lawmakers could pass Medicaid expansion as allowed by the Affordable Care Act this week if they had the political will. Tennessee is one of 14 states that have not expanded their Medicaid programs to cover people earning up to 138 percent of the poverty level.

(Johnson did not arrange to use Tennova property in advance, and during the news conference a hospital security officer advised her and the others to leave the Physicians Regional property. They finished the event across the street.)

The Republican supermajority in the state Legislature blocked former Gov. Bill Haslam’s Insure Tennessee proposal to expand TennCare, the state’s Medicaid program. Medicaid expansion as envisioned by Johnson and other Democrats isn’t gaining any traction in this legislative session.

Instead, legislation has been introduced that would direct Lee to seek a waiver from the federal Centers for Medicaid and Medicare Services to receive Medicaid funds in the form of block grants so Tennessee could fashion its own program. All three of Knox County’s state senators -- Lt. Gov Randy McNally, Becky Massey and Richard Briggs -- and state Rep. Jason Zachary are co-sponsors.

Applying for a Medicaid waiver doesn’t mean one would be granted -- no state currently receives its Medicaid funding in the form of a block grant, and any waiver would require coverage comparable to the standard Medicaid program.

Lee has been opposed to Medicaid expansion and has said the focus should be on lowering healthcare delivery costs. The Lee administration has not released details of any specific healthcare proposal the governor might reveal at tonight’s State of the State address. He will also deliver a “State of East Tennessee” speech in Knoxville on Tuesday.

Lee has made improving rural communities, especially the 15 counties identified as “distressed” by the Appalachian Regional Commission, a priority. His first executive order, issued Jan. 23, called on all state executive agencies to assess how they serve rural Tennesseans and develop recommendations for improvement.

A New Model

Clay County, where Cumberland River Hospital was located, is one of the 15 distressed counties in Tennessee. Also on the distressed counties list are Morgan, Scott, Hancock and Cocke counties in East Tennessee.

Myers asserted that rural economic conditions can’t be addressed without doing more to save rural hospitals. She said a rural hospital isn’t just another business.

“We talk about the cost of keeping a struggling rural hospital open, as we should. I think we need to talk too about the cost of a struggling rural hospital closing,” Myers said.

She pointed out that rural hospitals are often a community’s largest employer and provide high-paying jobs. When a rural hospital closes, skilled professional employees such as doctors and nurses move out of the community to find work. The effect ripples throughout the local economy.

Not only does closing a hospital remove a major economic engine, Myers said, it makes it more difficult to recruit new businesses and industry to communities already challenged by relatively remote locations and often underskilled workforces.

Myers said hospital closures “take away the very things poor, often unhealthy people need: access to healthcare, jobs and a stable economy.”

The phenomenon can hit urban neighborhoods as well. City Councilwoman Lauren Rider, whose district abuts the Physicians Regional property and who attended Johnson’s event at the hospital, said the negative effects of hospital closures extend beyond job losses and interruptions in patient care.

“This has left a giant void in the community,” Rider said.

The City of Knoxville is looking to buy the Physicians Regional campus, with half of it designated for a public safety complex housing the Knoxville Police and Fire departments, as well as Municipal Court and the Pension Board offices. The other half would be marketed to the private sector for redevelopment.

Rural counties without the means to pull off such a conversion aren’t able to recover as easily. Myers said it’s time for the state to change its approach to rural hospitals.

“We need to rethink how healthcare is organized,” Myers said. “I am convinced that if stakeholders came together for common purpose, helping the people and communities of Tennessee thrive, we could come up with innovative, exciting and effective solutions.”

Those solutions, if reached and implemented, could transform the rural hospital model.

“The hospital of the future probably will not look like the rural, community hospitals that dot the Tennessee landscape,” Myers said.