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Just 2 1/2 years ago, the doors were ready to close on Cuba Memorial Hospital.

The hospital on the hill overlooking the Allegany County village of 1,600 had a stairwell going to nowhere because it had spent its borrowed construction money to pay its regular bills. The beds in its acute-care unit were only half-full, and the accountants figured the hospital had enough money left to operate for 10 days.

"We were so close to going away," said Andrew Boser, the hospital's chief executive officer.

But the hospital defied an almost inexorable trend over the past several decades that has seen hospitals close in places such as Batavia, Salamanca, Albion, Jamestown and Olean. Unlike many hospitals serving rural areas and small cities, Cuba Memorial survived.

And then some.

While the hospital has been providing health care for 80 years, now its officials are talking about building an innovative $25 million to $40 million comprehensive care housing campus for senior citizens, providing everything from independent apartments to skilled nursing care and adult day care, all dressed up on a property enhanced by fish ponds.

The once moribund hospital has increased its work force from 160 to 220 and has started to emerge as an economic engine in the local economy. In addition to temporary construction jobs, the senior campus could double that employment.

In an era of struggling hospitals, Cuba officials say their story is an example of what can happen when a hospital clarifies its reasons for existing -- and can convince state officials to tweak funding formulas that can mean life or death to a health organization.

'Critical Access'

Cuba no longer has an emergency room or its accompanying operating room and intensive care unit. Instead, the hospital operates as a "critical access hospital," the only hospital with that designation in the southwestern corner of New York. The function of a critical access hospital is to handle the more mundane emergencies and medical problems in rural areas.

That means its "urgent care" center can handle asthma attacks, cuts and other medical problems that make up more than six of every 10 visits to most emergency rooms.

What it means for people like Nancy Burdick is that when her 5-year-old daughter, Madison, has an allergy attack at 11:30 at night, there is a place to take her quickly.

"When you hear your 5-year-old breathing like that, all raspy, it's kind of scary," Burdick said. "But we were able to take her in, see a triage nurse, and they gave her a breathing treatment. We were in and out in just over an hour."

That's another key to the hospital's success: It doesn't compete directly with the hospitals in Olean and Wellsville. Instead, it tries to complement them.

"If they go to a full-service hospital, like Olean, they're going to be triaged at the end of the scale because they have ambulances coming in, they have the car accidents, they have the cardiac arrests coming," said Jack Ormond, the hospital's financial officer.

"We take those people out of the pressure of the emergency room and treat them much faster. We take the pressure off an overburdened system in the Southern Tier."

Statistics show that only about 10 percent of physicians now practice in rural America, despite the fact that one-fourth of the population lives in these areas. The number of specialists per 100,000 people is less than a third of that in urban areas.

"Access to health care in rural America is tough," Boser said. "There are people just waiting to be taken care of. They sit and suffer."

As positive as the "critical access" factors may be, Cuba wouldn't have been able to turn the corner without both government and private help.

The most obvious government help came from the Allegany County Legislature, which directed $750,000 in Community Development Block Grant money to the hospital to keep the lights on three years ago.

In addition, Boser was able to convince state health authorities to allow the hospital to change its admission criteria. It also was allowed to use its acute-care beds -- the ones for short-term stays -- for longer "skilled nursing" stays of up to 60 days.

A quick remedy

The effects were immediate. Almost overnight, the hospital started operating in the black. But it still had the shadow of its unfinished building project and its debt looming in the background.

Last spring, the Bank of New York filed a foreclosure action in State Supreme Court against the hospital and the Allegany County Industrial Development Agency on the $6.4 million building bond.

The answer came last fall when Tower Investments, a California company, bought the debt at a considerably lower price and restructured the hospital's debt at about $3 million, essentially donating the reduction in debt to the hospital as a charitable contribution.

Ormond said the numbers are working in the hospital's favor.

"It's a much smaller mortgage that we can afford," he said, "and we're . . . keeping up with the principal and interest payments."

And hospital visits are up, growing from a low of 1,400 in 1997 to 10,900 in 2004.

Looking ahead

With the debt restructured, the hospital is free to pursue its continuing-care campus for seniors.

It's a concept similar to Canterbury Woods and the Weinberg Campus in Amherst, which allow progressive aging in one place, from independent apartment living status to assisted living to skilled nursing care. Participants buy a set of services up front.

What's new, Boser said, is that services in areas such as home health care, adult day care -- which the facility also would offer -- skilled nursing and assisted living have traditionally all been regulated separately, creating a regulatory nightmare for anyone trying to do them all. Cuba wants to be one of eight demonstration projects in which New York State treats them as one entity.

Ormond said the project's price tag, while still to be determined, is likely to be between $25 million and $40 million. Plans are still far from final, but projections call for 96 to 100 assisted-living units and 65 to 75 independent-living apartments.

Again, Boser says, it's a matter of filling needs. The hospital's surveys and U.S. Census figures show that many people leave the area when they're around 65, but they return to be near family as their health weakens in their later 70s.

Boser said figures show there are 60,000 seniors in a five-county area with Cuba at the center, and it seems like they've all decided to call to say they want to participate.

"What we found in the questionnaires was that 84 percent of the population surveyed had no plans because there's nothing to plan for other than a skilled nursing bed," said Ormond. "They can either go into low-income housing apartments or a skilled nursing facility bed. Those are the two ends of the spectrum."


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