LANSING -- Rural hospitals around the state are struggling to help find solutions to Michigan's budget crisis.

Meanwhile, about $97 million in federal support has been chopped from Michigan hospitals for 2003, and it may get worse, said Laura Appel, senior director of legislative policy for the Michigan Health and Hospital Association.

"They're talking about another [federal] cut," she said. "When will it stop?"

The state's Medicaid program will suffer the most from the budget woes. This year, Michigan will spend $7.2 billion on Medicaid for about 1.2 million people. Of this, the federal government pays for 55 percent -- the rest falls on the shoulders of state taxpayers.

Because small and rural hospitals have more elderly patients -- and thus more Medicare than Medicaid business -- they many not be hit as hard as hospitals in urban areas that see more Medicaid patients, Appel said.

But the funding cuts hurt everyone. Rural communities tend to be more economically depressed and have more unemployment and lower incomes than cities and suburbs. Hospitals in rural areas are thus "safety nets," treating patients regardless of their ability to pay.

The underfunding of programs such as Medicare and Medicaid, an increasing number of uninsured families and a dwindling number of health care workers are taking their toll on rural hospitals and seriously affecting their ability to continue to serve their communities.

"The people who are served by these health care providers deserve to know that their community hospital is facing real financial hardship," said MHA President Spencer Johnson. "The MHA is committed to getting that message to those who can make a difference."

The state's rural hospitals in 2001 provided more than $143 million worth of uncompensated care -- treatment not covered by Medicare, Medicaid and private insurance -- and that amount is sure to grow, Johnson said.

In February, leaders from nearly 100 rural hospitals met for a Small and Rural Hospital Conference in Lansing. The group worked to develop creative solutions to meet the fiscal challenges of the state budget.

"Everybody is trying to figure out what to do," Appel said. For example, many hospitals plan to shut down some units and "get back to the basics of patient care."

Units that usually come into question are rehabilitation and home health care, Appel said. Also, community activities intended to educate people about their own health will become more common. Recruiting health care professionals is also important, Appel said.

"Even the most rural of hospitals has great technology," she said. "There is a need to attract workers."

The MHA is pessimistic about federal relief, Appel said. The state's situation is not unique and is hard to attract attention to.

"I was in Washington last month asking for help," she said.

Community education and involvement are key to the survival of small and rural hospitals, Johnson said.

"Communities must become better informed about the economic and social value of their local hospitals before these facilities are forced to close their doors," he said.

© 2003, Capital News Service, Michigan State University School of Journalism