University of Michigan

The Rapid Closing of Rural Hospitals in America; How Healthcare is Affected

If you live or work in a rural geographic area of the United States, you may have become aware of an alarming statistic related to healthcare.

Access to care, particularly Emergency Room and Trauma Care, has been rapidly disappearing, as freestanding and hospital-based Emergency rooms close.

In every year since the year 2011, more hospitals have closed than have opened, and never has that been more important than in the rural communities of the United States. Hospitals cost money to keep their doors open, and with the high cost of labor, and a small volume of patients, many underinsured, rural hospitals are struggling.3

“Hospitals are often the economic drivers of rural communities” and as hospitals begin to suffer, so does a rural community. Currently, 21% of rural hospitals are at increased risk of closing, leaving communities without a back-up for emergent care. This represents approximately 403 hospitals that employ approximately 150,000 employees across 43 states and generate nearly $21.2 billion in total patient revenue per year. Yes, that is “B” for billions of dollars in revenue! 2,4

Navigant (an American Management consulting firm) set out recently to determine what factors if any, define what makes a hospital “essential” to a community. Certainly, what would make a hospital essential to residents of a state or small rural community might be different than what the government or payer system express. Items such as the ability to deliver trauma care and hospital employee to county population were considered, as well as Medicaid days versus uncompensated care versus net revenue.2

Keeping small Emergency facilities staffed with specialty personnel plus keeping the doors open 24/7 proves to be the largest financial burden for small rural communities, especially when actual foot traffic and admissions may be low.3

It is for this reason that 15 of the 21 hospitals that closed in 2016 were in rural communities. Particularly since 2010, nearly 90 rural hospitals have closed, with hundreds more at risk of doing so. Unfortunately, the statistics alone don’t foretell the human cost of communities going without care. Analysis by the Medicare Payment Advisory Commission determined that about one-third of the hospitals that closed were approximately “20 miles from the next closest hospital.”

 Although that doesn’t seem like much time/space geographically, imagine the time in terms of severe head trauma, a Pediatric choking incident, a massive myocardial infarction, a near-drowning, an exacerbation of COPD, or a cerebrovascular accident, where time could be salvaged brain tissue. Every one of those miles could mean the difference between functional years or possible death to a patient seeking assistance.

In those instances, it is hard to determine which hospitals and facilities might be deemed to be “essential” to the communities involved.3

In fact, a recent study in JAMA found that loss of rural hospitals with obstetric-based services was associated with a higher incidence of preterm births, putting greater risk on both mother and child.3

It isn’t just hospital care that suffers when rural hospital facilities close, however. Specialists tend to cluster around hospitals, setting up outpatient services, and office locations. Rehabilitation services thrive. And when a hospital subsequently closes, mental health issues and substance abuse tend to rise, as outpatient services decline, as does the economic prosperity and job loss of the surrounding area. Typically, when one rural hospital closes, per capita income in that community suffers ~ 4% loss, with a concurrent rise in unemployment of 1.6%, according to findings in Health Services Research.

One lesser-known problem related to decreased competition among hospitals is lower quality among the remaining community hospitals. When hospitals flourish, they compete for patients in a community based on pricing and quality. When competitors are removed, quality suffers.  That’s the conclusion of several recent studies and literature reviews.1

According to Becker’s Hospital Review, the three states with the most rural hospital closings are the following: Texas (17 hospitals), Tennessee (12 hospitals), and Georgia (7 hospitals). Even though most no longer provide inpatient care, a few offered minimum services for Outpatient, imaging, urgent care, or rehabilitation services at the time of this printing.4

So, what, exactly, is the future of rural hospital care? At this point, it appears that contracture of rural America’s hospital care will continue. Researchers have found that nearly 34 states have five or more rural hospitals at risk of closing, including Washington and Maine. “A loss of agricultural and manufacturing jobs has led to a corresponding degradation of the payer mix.” Residents in rural communities are primarily uninsured, either very old or very young, with higher proportions of Medicaid and Medicare. When rural hospitals rely on approximately 46% of their net revenue from Medicare patients, this cannot offset the cost of staff and expensive equipment or keeping specialty MD’s on-call or referral.4

What is possible? Support for the REACH act… Rural Emergency Acute Care Hospital Act, supported by Senators Chuck Grassley (R-IA), Amy Klobuchar (D-Mn), and Cory Gardner (R-CO), which would allow hospitals to stay open for Emergency Care without the need for inpatient beds. The REACH act would allow small rural hospitals to resize and stabilize while being able to anchor with larger hospitals, particularly academic systems, for support and services they don’t have. Better yet, it would allow them to remain open and be available for assistance in their communities.

Allowing even one of those rural hospitals in a high-risk category to remain open would mean a change in human lives.

It could declare another hospital “essential” for a high-risk pregnancy or a stroke victim living in a small town. When minutes are a matter of life or death, twenty miles seems too far away to me.

What do you believe? Will You support REACH?

References

  1. Beckerhospitalreview.com “3 states with the most rural hospital elements.” Ellison, a. June 17th, 2019.
  2. Mgma.com “Healthcare in rural America today.” MGMA research and analysis (background information).
  3. Modernhealthcare.com “Nearly a quarter of rural hospitals are on the brink of closure.” Kacik, A., February 20, 2019.
  4. Newsatjama.jama.com “JAMA Forum: The rural hospital problem.” Frakt, A. 3 months ago.
  5. Recycleintelligence.com “21% of rural hospitals at high financial risk of closing.” LaPointe, J., February 20, 2019.