Cheboygan hospital's turmoil, shrinkage part of necessary change in rural health

By Marianne Udow-Phillips/Center for Healthcare Research & Transformation

Debates about the Affordable Care Act will continue -- in the Supreme Court, in the halls of Congress and around the country -- but health reform is already happening all around us. All we need to do is look.

A case in point is Cheboygan on the shores of Lake Huron, where the local hospital was closed suddenly at the beginning of April, and then resurrected -- in a different form -- in mid-May.

Here’s what was in the press as it became clear the hospital would close in early April:

* The Cheboygan Memorial Hospital (CMH) is closing today leaving 300 employees without a job. Channel 9&10 News reports the hospital had filed for bankruptcy on March 1. (Michigan Radio)

* Cheboygan nurses and community leaders are in shock today. The sale of Cheboygan Memorial Hospital to Flint-based McLaren Health Care has fallen through at the last minute. (Interlochen Public Radio)

* “With this closure, we will have to close our emergency room,” said Shari Schult, CEO of CMH. “We will need to coordinate with area EMS services and local law enforcement to divert all ambulances to the most appropriate hospital. This closure … also means all of our employees are without a job,” she added. (Cheboygan News)

* The long-awaited proposed sale of CMH to McLaren Health Care was set to be finalized today. But now, federal regulations are causing it to come to a halt. CMH officials say the problem is with recertification and licensure under Medicare. And now, the organization is running out of money. (Cheboygan Memorial Hospital press release)

The impression left in the community was that the federal government was unreasonably blocking the sale by requiring new certifications, but later reports shed more light on the government’s position, which turned out to be more nuanced than originally reported.

By mid-May, a deal went through to restore emergency room and outpatient services at Cheboygan Memorial (and the rehiring of 150 staff) -- but the inpatient beds were to remain closed.

Classic good news/bad news? Not so fast.

The compelling question that was lost in the story is this: Should we really mourn the closure of those inpatient beds? After all, Cheboygan Memorial was a small hospital, in bankruptcy, with fewer than 50 acute care beds.

People living in rural areas with small hospitals would say yes, citing critical access needs and reminding us that hospitals are often a community’s major employer. But while the strong community identity of these hospitals is completely understandable, the questions we need to ask and answer are: Do they deliver the best care? Is that care cost-effective?  Would traveling farther put people at risk?

In fact, there is considerable research to make us question the assumption that keeping small hospitals open is always a good idea, especially running as they have historically: as independent, community-based organizations.

Practice does matter. When it comes to certain health-care services, doing more of something is associated with better, safer outcomes for patients. Small hospitals don’t have the volume necessary for staff to practice the full range of service needs that larger hospitals do.

And if we are ever going to get a handle on the cost of care, economies of scale and efficiencies will certainly be part of the solution.

In the end, it was not only inevitable, but probably a good thing that Cheboygan Memorial Hospital closed and reopened -- with scaled back services -- as part of the much larger McLaren Health System. Emergency and basic care will remain in the community; inpatient care will likely mostly be delivered at McLaren Northern Michigan Hospital, 30 miles away.

Some are still unhappy: after all, Cheboygan Memorial was a major employer.

But this is health-care reform on the ground, and it ain’t all bad.