Pandemic threatens fragile rural health-care system in South Dakota


Editor’s note: This abridged article is part a special report by South Dakota News Watch called “Small Towns, Big Challenges.” See the entire series at

The COVID-19 pandemic has placed a significant and unexpected financial burden on rural health-care providers who were already struggling to maintain hospitals and clinics that help keep small-town residents — and their communities — alive and well.

A slowdown in patient visits and drop in medical procedures due to fears of spreading the virus have led to a major loss of revenues for medical providers and health-care systems that serve rural areas. While the virus has not led to mass infections in small towns, the drop-off in activity and billable services has put stress on the already fragile financial state of many rural clinics, small hospitals and dental offices.

With the first wave of the pandemic possibly over, more safety measures in place and life returning somewhat to normal, most clinics and hospitals in rural South Dakota have headed off any imminent concern of closure.

Yet in a rural health-care system made up of a patchwork of providers and hospital systems, the losses from the pandemic could curtail the hiring of health-care workers, slow plans to expand services, and further restrict access to health care for hundreds of thousands of small-town and rural residents of the state.

Horizon Health Care, a rural health provider with more than two dozen medical and dental clinics in small towns across South Dakota, saw its revenue fall by roughly half in the weeks after the pandemic hit and patients began staying home, according to Wade Erickson, chief financial and operations officer.

By early June, patient activity and revenues had returned to about 90% of normal, Erickson said, and the group benefited from receiving about $3 million in emergency aid from the federal CARES Act pandemic bailout fund.

The aid and bounceback in procedures have been critical to Horizon, based in Howard, S.D., but especially to its patients in rural communities who are never turned away because of ability to pay, Erickson said. About a third of Horizon’s funding comes from the federal government, and about 20% of its patients are uninsured.

“In really rural communities where we are, just about touching every corner of South Dakota, we’re really the only access to care that they have,” Erickson said.

Access to health care remains a serious challenge in much of rural South Dakota, where federal data show that residents tend to have greater rates of serious illness and death from diseases and far less access to doctors, nurses and dentists than in the state’s few urban areas.

Rural residents “face a unique combination of factors that create disparities in health care not found in urban areas,” according to the National Rural Health Association.

The pandemic has heightened the challenge of providing medical care to rural areas and small towns that the vast majority of South Dakotans call home.

The rural medical system in South Dakota varies by location, but in general, health care is provided through an informal continuum of care in which patients must travel more owing to the remoteness of their residence or as their care needs increase.

Medical access a trade-off in rural areas

Small-town health care in rural areas across the country is supported by the federal Critical Access Hospital program, which provides targeted funding through a federal Medicare reimbursement program for small regional hospitals with 25 or fewer beds.

Bryan Breitling is the regional administrator at Hand County Memorial Hospital in Miller, a critical-access hospital that is part of the Avera Health system. Breitling said critical-access facilities were better-positioned to withstand the revenue drop associated with the pandemic than urban medical centers.

“COVID-19 is going to have less of an impact on critical-access hospitals [than] it will have on our more urban counterparts,” Breitling said. “We do have a cost-based reimbursement mechanism in there from Medicare … and so, from that standpoint, we’re going to largely be protected.”

Yet despite those protections, the 38 critical-access hospitals in South Dakota — including facilities in Armour, Burke, De Smet, Eureka, Freeman, Mobridge, Parkston, Philip, Viborg, Webster and Winner, among others — have also taken a financial hit, Breitling said.

“The revenues have taken a dive, clearly. So anyone who presents through the emergency room who has a broken arm or a heart attack, those types of patients are still being seen and being cared for,” he said. “It’s the patients that used to come in for routine physicals, for screenings, all of those traditional regular health-related issues. Those have essentially ended for the last two months and so we’re in the process of restarting those again, and that’s where a lot of that revenue issue is.”

The drop in people seeking medical treatment during the pandemic may have unexpected consequences, including among patients who miss an annual physical and could be exposed to greater danger from slow-developing illnesses such as skin cancer.

Breitling said one pressing concern is that children may be less protected against other illnesses upon returning to school in the fall.

“There are some stats out there that say over the last couple of months, fewer people have brought their kids in for wellness visits, which translates into fewer vaccinations and things like that,” he said. “So we need to get back to the vaccinations to get them protected this fall once the traditional cold or flu season comes into place.”

Recruitment a challenge; tele-health on the rise

Recruiting doctors, nurses and dentists to practice in towns of 2,000 people or fewer has been an ongoing challenge for health-care systems and rural hospitals.

Some practitioners seek higher pay, greater social options, easier access to housing, and the prestige of working in big-city hospitals, and are not interested in living in a small town in the early stages of their careers.

Horizon Health Care is in almost constant need of qualified personnel and tries to highlight the benefits of living and working in a small community when pitching prospective employees, Erickson said.

“It is hard at times because a lot of times they see the money, and money talks, and we try to compete as best we can with salaries,” he said.

But Horizon has had success in attracting practitioners who either grew up in a small town or who see the value in providing a service that is absolutely critical to the community and its people, and in living in a safe, quiet community, Erickson said.

“We have this opportunity in rural places to bring back true primary care through the entire life spectrum, and there’s great satisfaction in that,” he said. “There’s this great opportunity to see kids all the way up to our elder populations, and there’s a challenge in that you’ve got to know a lot more things.”

Federal programs that allow new practitioners to eliminate part or all of their student debt by agreeing to practice in underserved areas can also be a strong incentive.

The COVID-19 pandemic has led to an expansion of tele-health services in which patients use computers and an internet connection to visit in real time with a doctor or nurse. Avera Health has been a national leader in providing tele-health, but the pandemic has sped up the transition to tele-health by smaller community health systems as well.

One problem providers have faced is that federal Medicare and Medicaid programs did not in many cases reimburse providers for tele-health appointments and care. During the pandemic, the CARES Act has expanded reimbursement of tele-health and provided $158 million in funding for providers to engage in tele-health and improve tele-health services. The Community HealthCare Association of the Dakotas received about $450,000 in the latest round of payments on June 24 for computers and videoconferencing equipment to expand services.

Rural health providers are hopeful the tele-health reimbursements may be made permanent once the pandemic subsides.


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