Rural hospital closures are increasing and generating wider scale healthcare issues
… Rural hospital closures are creating a growing healthcare challenge …


A national healthcare issue that cannot heal on its own

John G. Baresky

Closing rural hospitals are reducing access to care in multiple states

Between January 2010 and January 2020, 114 rural hospitals closed. More than 30 of these were critical access facilities. Data from the University of North Carolina Cecil G. Sheps Center for Research provides further insights showing that from 2005 to 2020 a total of 170 rural hospitals shut down.

There seems to be no indication this trend is subsiding and a sizable portion of it has occurred during a time of record economic expansion. There is no telling how many more would have closed their doors had a weakened economy continued.

Key drivers of rural hospital closures

There are many reasons behind the closures of so many rural hospitals and it’s a far more complicated environment than most persons realize. These are some of the leading triggers that contribute to the ongoing contraction of quality healthcare in the rural U.S.A.:

  • Hospital and health system consolidation has absorbed more profitable rural hospitals leaving the less profitable ones to fend for themselves
  • Commercial and government healthcare reimbursement (Medicare, Medicaid, etc.) falls short of the minimum rural hospitals require to operate effectively
  • The number of people living in rural areas across the nation has dropped so caseloads and cash flow into rural hospitals is reduced
  • With fewer patients and income rural hospitals struggle to stay afloat, attract new staff members or upgrade equipment and facilities
  • Procedures that once required overnight or 2 to 3 days of hospital stays are performed on an outpatient basis further reducing income

Key benefits of rural hospitals

Frequently overlooked, rural hospitals are a pivotal component of our national healthcare system. They do not have the size and scope of services provided by mid-sized hospitals or hospitals aligned with healthcare systems or academic/university hospitals. Regardless of size, their place in the U.S. healthcare system is essential for many reasons:

  • Rural hospitals provide routine and emergency access to care for farmers and their families, the core source of our national food supply, plus their nearby communities
  • When patient loads peak, as seen in the COVID-19 pandemic, rural hospitals can absorb some of the patient load so larger facilities are less overwhelmed
  • Rural hospitals serve as business catalysts in the communities they serve that attract new residents and add vitality to the local economy
  • Besides conventional hospital care, rural hospitals are the champions behind the local business, school, church and other community health and wellness initiatives such as screenings, smoking cessation groups, drug and alcohol addiction awareness, pre and postnatal wellness for mothers and infants plus other programs

Misconceptions about rural hospital closings

There is a wide misunderstanding of the importance of rural hospitals. This includes:

  • Rural hospitals should close so resources allocated to them are channeled into mid-sized and larger hospitals and health systems; by centralizing healthcare services it makes it more convenient for more patients to access multiple tiers of care in one location
  • A large number of rural hospital closings is a natural progression of market forces that fairly redistributes access to care although disruption occurs as these changes take place
  • Access to quality healthcare in the United States, including rural areas, is the best in the world; farmers and the residents of rural communities can easily travel to the next closest rural hospital for care in an emergency

The reality of rural hospitals in the United States

The average rural hospital employs about 300 staff members and is located in a community of approximately 60,000 people. When a rural hospital closes, the loss of work is significant in terms of the total jobs available in a community of that size.

It also means 60,000 citizens are without an advanced care provider capable of saving patient lives at the rural hospital point-of-care setting or stabilizing more critical patients so they can survive the journey to reach a larger facility with more resources.

The quality of care in rural America is falling drastically
The disparity of care in rural communities data from the Robert S. Woods Foundation and the National Center of Health Statistics

In emerging markets and 3rd world nations, the trend is to increase access to care outside of major metropolitan areas and port cities. A top priority in these countries is to bring viable healthcare services to their rural areas to reduce disease and improve overall health and domestic economics.

Conversely, as a medical and economic world leader, the closure of rural hospitals indicates the U.S. is going in the opposite direction of this trend. The mortality rate in the U.S. is greater among populations that reside in rural areas compared to those who live in urban areas and this trend is climbing. Over the last 15 years, the difference in mortality between rural and urban areas has tripled — from a 6 percent difference to an 18 percent difference in 2015.

Injury deaths in rural areas is considerably higher than urban areas
Injury deaths data from the Centers for Disease Control (CDC) and the Robert S. Woods Foundation

Minutes and miles count in rural America when a rural hospital closes and the patient is required to travel to the next closest facility which on average is 20 miles away or further. In these circumstances and others, healthcare professionals will agree that time is an essential element in successful patient outcomes:

  • Asthma and other respiratory emergencies
  • Burns
  • Cardiac care
  • Childbirth
  • Trauma stemming from accidents involving farm equipment, auto, motorcycle, construction or business and household mishaps

Women’s Healthcare

A substantial portion, almost half, of rural hospitals are not able to support obstetric and gynecologic services. This translates to less than half of rural women having access to perinatal care within a 30-minute drive of their homes. Over 10% of rural women have to drive 100 miles or more to access OBGYN care.

Understandably, geography and the inherent elements of rural living mean that quality healthcare will simply not be available within a 10-minute drive of every household. It does urgently convey that OBGYN care should be available at the closest provider of advanced treatment services which is a rural hospital. Access to quality OBGYN care issues impacts women’s and infant’s health before, during and after pregnancy with further social and cost consequences moving forward.

Telehealth or telemedicine is a growing resource but not a solution to help rural hospitals stay open

The Office for the Advancement of Telehealth (OAT) supports telehealth technologies for health care delivery, education and health information services as applied to rural healthcare. They are well aware of the critical needs in farm communities and other remote areas that lack sufficient access to healthcare.

Telehealth is a useful resource for limited diagnosis, patient monitoring and follow-up. In rural healthcare it provides supportive care but has two primary shortcomings:

  • Telehealth is not able to put hands on a patient to perform an internal examination or perform a medical procedure (examples of this are the specific care requirements involved in delivering a baby or performing emergency surgery to halt hemorrhaging)
  • Reliable and far-reaching broadband access in rural areas is still a challenge; while the Internet has been with us for roughly 30 years, there are still wide swaths of the nation without reliable Internet access and mobile devices are not enough of a difference-maker to fill this gap

Options that can help prevent rural hospital closings

There are various ways to help alleviate the care and cost imbalance in rural hospitals. As a market segment, there is not a one size fits all solution. A luxury outcome would be to restore the operations of the 30 critical access hospitals that have closed. The immediate primary goal is to prevent more closures and provide sound operational footing for those that are still open:

  • Stabilization of reimbursement and the ability to pay employees a competitive wage in rural hospitals will go a long way in empowering them to provide quality care and manage operations without having to constantly juggle finances while cutting and reintroducing care as funding changes allow. Increasing reimbursement for rural hospitals’ care is one minimal requirement so they can support themselves and continue to deliver care to uninsured, underinsured and other disadvantaged patients. This includes a long term (versus year-to-year) stabilization of Medicare reimbursement plus a firm solution to minimize wage disparity issues that erode rural hospitals’ ability to operate and attract new talent.
  • Apply pressure to states not participating in Medicaid expansion. These states (at least 18) are holding out on the beneficial provisions of the Medicaid expansion opportunities which results in more citizens (especially the elderly, children or other economically disadvantaged individuals) not having the ability to pay nor is there a provision in place for Medicaid to pay for them on their behalf.
  • Develop strategies to establish closer relationships between academic/university hospitals and health systems with rural hospitals to not only train future generations of nurses, doctors and other clinicians but also share purchasing power resources that a commercial for-profit hospital or health system will not. An example of this is the Vanderbilt Health Purchasing Collaborative (VHPC).
  • Make provisions for rural hospitals to allow the skills of nurse practitioners and physician assistants to be more widely utilized. This is not meant to supplant the role of medical doctors in rural hospitals. It is intended to augment the level of care they provide. The shortage of medical doctors and for that matter, nurses, in the United States is an ongoing challenge. By enabling rural hospitals to retain medical doctors and nurse practitioners by providing them with additional clinician support, they can focus on the most difficult cases and the rural hospital is better able to manage through peaks and troughs in patient loads.
  • Invite disruption to compete against the traditional healthcare supply chain business models by working with Amazon (NASDAQ: AMZN) and perhaps a partnership with rural health and agricultural associations or other enterprising stakeholders. By collectively aligning programs, processes and systems with the needs and budgets of rural hospitals, it can help them lower the cost of procurement and improve their finances while breaking apart a decades-old supply chain business model that has ensnared larger hospitals and health systems as well.

Maintaining rural hospitals is preventative medicine for larger healthcare issues

Rural hospital closures lead to other issues. Those that remain open in adjacent communities are not automatically equipped to absorb the patients from one or more surrounding towns.

Reopening a closed rural hospital is a monumental and expensive task even before its first patient comes through the door. It involves re-installing and certifying equipment, an exhaustive inventory assessment and restocking of supplies, new vendor contracts plus the formation of a new management team and finding new administrative and medical staff as the number of nurses, doctors and other clinicians is already in short supply across the nation.

Communities with closed rural hospitals become disadvantaged to the extent that when new residents and businesses are seeking to locate in a new location, access to care is important. It can be a tipping point for them to opt for the town that has better access to healthcare through its rural hospital. The U.S. Department of Veterans Affairs (VA) has expressed urgent concern about the issue as about 25% of U.S. veterans reside in rural and remote areas.

Although separated by distance, rural hospitals are an integral part of the U.S. national healthcare network. Each one is a vital resource. The options above represent opportunities to maintain and revitalize this mainstay segment that provides healthcare and economic benefits to farmers and their rural communities.

Thank you for reading this story

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