GOP Mayor Rallies for Medicaid Expansion, Help for Rural Hospitals on Capitol Hill

Adam O’Neal walked 273 miles from his town of Belhaven to the park just north of the U.S. Senate to highlight the precarious state of the nation’s rural hospitals and try to save his own.
by | July 28, 2014 AT 8:00 PM
Belhaven, N.C., Mayor Adam O'Neal, (far left) at the end of his two-week, 300-mile march to Washington after his state refused to expand Medicaid and his community's hospital closed July 1. Chris Kardish

An unlikely ally of Medicaid expansion closed a nearly 300-mile journey with a rally Monday outside the U.S. Capitol for the hospital his town lost.

Republican Mayor Adam O’Neal walked 273 miles from his town of Belhaven, North Carolina, to the park just north of the U.S. Senate to highlight the precarious state of the nation’s rural hospitals and try to save his own. Flanked by members of the North Carolina chapter of the NAACP and union members, his pitch underscored how the necessity to govern sometimes outweighs party ideology at the local level.

“I’m a conservative Republican and understand some of the suspicions political leaders in my party have that Washington won’t keep its promises, but those concerns do not trump the need to maintain a level of services in struggling communities,” he said, reading from a letter to President Barack Obama. “Real citizens dying should not be the soldiers of the South’s defiance over the new health care law.”

Twenty-four states, including most of the South, have yet to expand the state-federal health program for the poor to adults earning up to 138 percent of the federal poverty level. People earning between 100 percent of the federal poverty line and 138 percent in those states generally don’t quality for public health care or for subsidies to purchase private health insurance through the exchanges created by the Affordable Care Act. The law’s designers never envisioned that gap would exist, but the Supreme Court made Medicaid expansion optional in a 2012 decision that largely upheld the rest of the law.

The Supreme Court decision also further imperiled rural and urban hospitals serving large numbers of the poor and uninsured because the law also cuts billions of dollars in payments those safety-net providers received to keep them afloat under the assumption that they wouldn’t need as much compensation because many of their patients would receive Medicaid coverage.

Rural hospitals are already more dependent on Medicaid and Medicare, which usually reimburse doctors at lower levels than private insurance. More than 40 percent of rural hospitals in the U.S. are regularly running deficits, according to the National Rural Health Association. Many of these facilities depend on subsidies from local or county governments, which often own the hospital outright.

That was the case with Pungo District Hospital prior to 2011, when Carolina-based Vidant Health bought the 49-bed facility serving more than 20,000 people in Beaufort and Hyde counties. For some in those areas, Pungo was the only source of emergency care for 80 miles.

While O’Neal said Medicaid expansion was vital to the financial situation of rural health providers, he also blamed the “greed” of a “conglomerate” and what he called a startling trend of major hospital systems buying up isolated facilities with little know-how or intention of maintaining services.

Last fall Vidant announced it was closing Pungo, partly because of the state’s refusal to expand Medicaid, though the company’s CEO also said the extra money still likely would not have been enough to pay for much-needed upgrades for the aging facility.

Advocates say the importance of the facility became dramatically clear to the community when 48-year-old Portia Gibbs died of a heart attack awaiting an airlift to a hospital 75 miles away days after the closure of Pungo, but a Hyde County emergency management official argues Gibbs' heart attack was too severe to be treated in time and the mayor has unfairly politicized the death. An upright casket reading “Brought to you by Vidant Health” in gothic lettering sat next to the podium where O’Neal and other activists made their remarks.

Pungo lost $1.7 million in the fiscal year ending September 2012, but Vidant’s income as a whole from operations was $112 million, according tax returns from the non-profit, which includes eight hospitals and a host of other practices.

In late March it looked like Vidant and Belhaven had reached an agreement that would hand over the hospital to the town July 1, the date when Pungo was expected to close. But negotiations broke down, with the town claiming Vidant went back on its deal without warning. Vidant, however, claimed the town failed to put in place a plan for a transfer as required by a mediated deal. Following the breakdown, the town and the NAACP resubmitted a Justice Department complaint arguing the closure violates the Civil Rights Act. That complaint is still pending.

O’Neal then met with members of North Carolina’s congressional delegation as well as other supporters of rural health, such as Iowa Sen. Tom Harkin, who sponsored a bipartisan bill in May that would raise funding levels for rural hospitals. O’Neal wants better funding for rural health but also legislation that ensures critical access hospitals, those considered the most isolated in the U.S., are protected from closure. He also wants immediate action on Pungo, but how exactly Congress could do that is unclear.

“Somebody in that Capitol dome needs to pick up a phone and fix this,” he said.