By M.D. Kittle

MADISON — Gov. Tony Evers’ budget proposal calling for the creation of a public option plan — allowing people to buy into the state’s Medicaid program — could be devastating to cash-strapped rural hospitals, many already “just holding on.”

The Democrat says creating a state government-controlled health insurance marketplace and a public option for BadgerCare could help save the state money while expanding health care coverage.

But a study by Navigant Consulting Inc. found that a public option reimbursing at routinely low government health rates could put as much as 20.5 percent of rural hospitals in Wisconsin at risk of closing.

To put that in perspective, in 2017, 30 percent of Wisconsin’s population lived in rural areas, accounting for more than 1.7 million people relying on rural hospitals.

“When you go down the route of the public option, with more control of government health care, you go back to those dark days of the 1980s and early 1990s when people in this state could not access quality health care, in some cases without leaving the state,” said Mike Mikalsen, legislative aide to Sen Steve Nass (R-Whitewater).

“The risk and dangers of a public option are significant,” Mikalsen added.

Nationally, the Navigant analysis found a public option based on government-run health care rates could place as many as 55 percent of the 1,037 rural hospitals across 46 states in peril of closing.

At the time of the 2019 study, the health care centers in the high risk category represented more than 63,000 staffed beds and 420,000 employees nationwide.

Those kinds of numbers have come into sharp focus over the course of a historic pandemic.

“We helped at all stages of the pandemic. Imagine what that was like in November, when virtually every hospital bed in the state was filled. Now imagine that without a rural health system,” said Tim Size, executive director of the Rural Wisconsin Health Cooperative. The cooperative is owned and operated by 43 rural, acute, general medical-surgical hospitals from Monroe to Ashland.

Size says he’s not taking political sides on the pros and cons of a public option, but he agrees that “anything that recedes health care reimbursement rates at any level will create closures.”

“We have rural hospitals just holding on now,” Size said, noting the constant battles with low reimbursement rates, health care staffing shortages, “aggressive commercial insurers” and what he describes as a “double tsunami” of older health care professionals leaving medicine and becoming more frequent consumers of health care.

The rural health care advocate said the system has been blessed; it hasn’t lost a hospital in over a decade. But the pandemic and the economic damage it did to rural communities that had finally recovered from the last “Great Recession” have left many smaller health care providers extremely vulnerable.

“If the state and federal governments want rural hospitals, they have the power to make sure they’re there,” Size said. “If they don’t, we’ll disappear.”

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