Independent Rural Hospital Struggles On — Like Many

Oct 2, 2019

Not since 2006 has Bigfork Valley Hospital taken in more money than it spent providing care. Despite the nonstop financial woes, it continues on and even makes expensive improvements. The hospital recently built a memory care wing called Aspen Circle. Inside, Frank Sinatra wafts from a CD player. The unit has the feel of a homey lodge. It is open and airy, yet secure, explained Bigfork Valley Hospital CEO Aaron Saude on a recent tour.

“A resident who wants to wander can do that endless without hitting the end of a hallway and getting kind of confused,” Saude said.

Located in a remote area of northern Minnesota, the town of Bigfork — population 445 — is the smallest in the state with a hospital.

Operating in the red has been a way of life here.

Opposite the memory care unit, the emergency room sits idle, but it’s staffed up and ready. Saude said the ER is not a moneymaker but is a critical Bigfork Valley Hospital service.

“It’s so important for our community and also for tourists when they get a fishhook in their hand or have chest pains,” Saude said.

The closest hospital is more than 40 miles away. Getting there, especially in the depths of winter, can be a harrowing trip.

Dr. George Rounds said if the Bigfork hospital ever shut down, some critically ill people might not survive the ride.

“There’s a thing called the golden hour,” Rounds said. “If you don’t get to the hospital within that golden hour, your chances of survival are significantly less.”

A new sign for Bigfork Valley Hospital stands in front of the hospital building.
Credit Mark Zdechlik

Bigfork Valley Hospital CEO Aaron Saude stands in front of the hospital's emergency room. Despite the nonstop financial woes, the hospital continues on and even makes expensive improvements.

Newly published research from the University of Washington indicates there’s a significant increase in the death rate for time-sensitive health problems in rural areas after a hospital serving the region has closed.

Bigfork Valley Hospital is owned by a special unit of government called a hospital district. It has taxing authority throughout a 1,500-square-mile region because more than a dozen local governments agreed to join the district. Dr. Rounds retired after nearly 40 years at the hospital. He now chairs the hospital district board and has a front-row view of the ongoing financial struggles.

Dr. George Rounds, says if the Bigfork hospital ever shut down some critically ill people might not survive the ride.
Credit Mark Zdechlik / MPR News

“We’ll keep limping along as long as we can,” Rounds said.

Rural hospitals face unique challenges. They serve disproportionately older, sicker populations than their metro area counterparts.

Patients are less likely to have insurance that covers the cost of care. The Minnesota Hospital Association says more than 1 in 4 Minnesota hospitals lose money on operations, and most of them are in rural parts of the state.

Health care consultant Dan Zismer said financial pressures are forcing independent rural hospitals to join hospital systems with deeper pockets to stay open. That often leads to the elimination of local services aside from some outpatient and emergency care.

“Is health care going to go away from rural America?” asked Zismer, “No. But it’s probably going to continue to change, pretty dramatically.”

71-year-old Mike Kocian’s family has owned the grocery store in Bigfork all his life.
Credit Mark Zdechlik / MPR News

Like other remote hospitals, Bigfork Valley gets somewhat more generous payments from Medicare, but Rounds says they still lose money on Medicare patients.

“If we bill $300, they will allow $150,” Rounds said.

The hospital district recently doubled its levy effective this year, but it’s not enough. Rounds said the area can’t sustain a tax increase large enough to make up for all the losses.

Bigfork’s hospital is able to keep its doors open amid the losses by spending money intended for maintenance and equipment.

With more than 200 people on its payroll, Bigfork Valley Hospital is the biggest employer in town.

It is also a prized asset here.

“We just love our hospital,” said 71-year-old Mike Kocian. His family has owned the grocery store in Bigfork all his life. “We think so highly of our doctors. We’re so proud of our facility.” Kocian said if the hospital shut down, it would trigger a downward spiral for the local economy.

“It’s a tremendous asset to not only Bigfork, but all the surrounding communities,” Kocian said.

But Bigfork Valley Hospital CEO Saude said the status quo is not sustainable.

“We need to do something to turn it around,” Saude said. “Within five years, we could be in trouble.”

Saude said the hospital may have to surrender its independence and join a larger system. Given the demographic and economic trends challenging independent rural hospitals, affiliation may be the best option for many.

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This story is part of "Seeking A Cure: The Quest To Save Rural Hospitals," a collaborative project from the Institute for Nonprofit News and INN members KCUR, IowaWatch, Bridge Magazine, Wisconsin Watch, Side Effects Public Media and The Conversation; as well as Iowa Public Radio, Minnesota Public Radio, Wisconsin Public Radio, The Gazette (Cedar Rapids, IA), Iowa Falls Times Citizen and N'west Iowa REVIEW. The project was made possible by support from INN, with additional support from the Solutions Journalism Network, a nonprofit organization dedicated to rigorous and compelling reporting about responses to social problems. For more stories visit hospitals.iowawatch.org