Nearly 1 in 3 US rural hospitals at risk of closure

Editor's Note

More than 700 rural hospitals, representing 31% of all rural hospitals in the country, are at risk of closure, according to a report from the Center for Healthcare Quality & Payment Reform. Chief Healthcare Executive reported the news August 8.

According to the article, 16% of all rural hospitals—a total of 360—are considered immediate closure risks. Although the crisis is nationwide, nine states (including Kansas, New York, Texas, Oklahoma, Mississippi, and Alabama) are in a situation where half or more of their rural hospitals could close. Although Texas has the highest number of at risk hospitals—80—Kansas has a slightly higher number at immediate risk, at 31 versus 30.

The findings show that hospitals are losing money on patient care in part because insurers, particularly private ones, are not providing sufficient reimbursements, Chief Healthcare Executive reports. Financial instability is compounded by the fact that rural hospitals typically have lower reserves to cushion against economic hardships. Sources quoted in the article also cite other challenges facing rural hospitals, such as services moving to urban areas following an acquisition by a larger health system.

Half of America's rural hospitals are losing money, and more than 130 have closed since 2010, Chief Healthcare Executive reports, citing data from the Chartis Center for Rural Health. Staffing shortages exacerbate these financial issues, with rural hospitals struggling to recruit and retain essential personnel, including not just doctors but also nurses, respiratory techs, and even food service workers.

According to the article, the Center for Healthcare Quality & Payment Reform calls for better reimbursement rates from both the government and private insurers. The center suggests that a federal investment of an additional $5 billion—just one-tenth of 1% of national healthcare spending—could be sufficient to prevent the closure of many vulnerable rural hospitals.