Times Observer file photo Hospital Chief Executive Officer Rick Allen speaks during the Warren General Hospital annual meeting for 2024.

One of three Chautauqua County hospitals is proposing a change in operations that is a game-changer for the community and rural health care throughout the nation. In a news release from Allegheny Health Network last week, AHN Westfield Memorial Hospital announced it would be pursuing a rural emergency hospital designation.

This effort transitions the facility from a small inpatient hospital to 24-7 emergency, observation and outpatient care hospital that meets specific criteria established by the U.S. Centers for Medicare and Medicaid Services and the New York state Department of Health. “The rural emergency hospital designation was built for a hospital like Westfield,” said Rodney Buchanan, Westfield Memorial Hospital administrator. “We are a vital health care access point for our community, but the vast majority of the services we provide are outpatient in nature.”

Rural Information Health Hub notes on its website that Congress established the designation in December 2020 as a response to the loss of essential healthcare services in rural areas due to hospital closures. It is a designation created to maintain access to emergency outpatient hospital services that may not be able to support or sustain a Critical Access Hospital or small rural hospital.

Hospital viability, especially in small towns, is a relentless crisis.

According to the North Carolina Rural Health Research Program, 148 rural hospitals closed or converted services between January 2010 and November 2023. In addition, a February 2020 Chartis Group report identified 453 financially vulnerable rural hospitals at risk of closing.

Warren General Hospital, however, is an anomaly when it comes to these concerns for the moment. Though it reported a $1.5 million loss in 2023, its most recent Internal Revenue Service 990 forms provide a more upbeat snapshot. In 2022, the institution had a surplus of $1.6 million, which was a decrease from 2021 when it recorded a surplus of $$7.9 million.

Warren General also remains an independently run facility. Its joint venture with Allegheny Health Network and LECOM Health was started to create a financially strong core for building new service lines, invest in new technology, and to establish new healthcare educational programs. The partnership also has allowed for major renovations at the facility and its services.

Compared to Westfield, which has a total of four inpatient beds, Warren General is a more comprehensive location with 87 beds. It serves a county of nearly 40,000-plus residents while AHN Westfield — about 10 miles from the state border on Lake Erie — serves a community of around 29,000 residents.

Though AHN Westfield Memorial Hospital has been a consistent engine of care in recent years, its financial reports are not as transparent. Once it fully connected with Allegheny Health Network as an affiliate organization, its revenues and expenses are absorbed into the parent company and no longer available through Guidestar, an online source for nonprofit information.

But fiscal difficulties for those health-care giants have to be part of the equation in the designation change, considering recent results. For the 2023 fiscal year, Allegheny Health Network reported a loss of $173 million, a decrease from its $181 million loss in 2022. UPMC, which is affiliated with the Jamestown hospital and is traditionally synonymous with annual surpluses, reported an operating loss of $198 million in 2023 after having a $162 million profit in 2022.

With the big guns in the business seeing losses, efforts to stem the tide need to come from all the locations. For Westfield Memorial, making the conversion to a rural emergency hospital provides greater reimbursement certainty that ensures long-term financial and operational stability. That allows care access for its patients in the village and town and the surrounding Chautauqua County region to continue. Designated rural emergency hospitals also are eligible for additional federal funding and higher Medicare reimbursement rates.

“Maintaining a 24/7 inpatient unit is costly, and the expenses aren’t warranted by the volume we see at Westfield,” Buchanan said in the news release last week. “By converting to a rural emergency hospital, we can redirect those resources toward new programs that are a better fit for our community and retain and grow the specialties and services that are most important to our patients.”

Westfield’s synergy with AHN Saint Vincent in Erie, Pa., a 348-bed hospital that provides comprehensive access to obstetrical care, cardiovascular surgery, cancer care, emergency care and other specialties, is a key part of the process. Once the new model is approved, rural emergency hospitals are not allowed to keep a patient for more than 24 hours unless there are extenuating circumstances.

Many of those individuals will then be transferred to Saint Vincent, which is a significant partner for almost 20 years. During that time, it has helped Westfield Memorial flourish. Moving forward, its oversight will keep the facility operational.

Health-care in Chautauqua County continues to be a complicated mix. All the region’s big players are evident with AHN in Westfield, UPMC Chautauqua in Jamestown and Kaleida through its collaboration with Brooks-TLC.

These affiliations with larger entities bring competition while also improving the care being delivered locally. Brooks-TLC in Dunkirk needed Kaleida Health in its effort to build a new hospital that will be downsized in terms of its current bed numbers but also allows for state-of-the-art technology and innovation in health care that is missing at the current and outdated site.

Warren General’s administration, based on its recent history, is top notch. However, no one is quite sure what health care will look like even 10 years from now.

Westfield’s potential transition is just one more piece to the changing model that continues to evolve quicker than most other industries — throughout the nation. It is worth watching.

John D’Agostino is editor of the Times Observer, The Post-Journal and OBSERVER in Dunkirk, N.Y. Send comments to jdagostino@observertoday.com or call 814-723-8200, ext. 253.