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Hundreds of rural U.S. hospitals are at risk of closing, according to an analysis from healthcare advisory firm Chartis.
Since 2010, 143 rural hospitals have shut down, while another 453 are vulnerable to closure.
The states with the highest percentage of vulnerable rural hospitals are Tennessee (53%), Florida (50%), Texas (50%), Missouri (46%), and Mississippi (42%).
Factors Influencing Closure Risk
The Chartis analysis looked at seven factors that impact a hospital’s risk of closure. Two key financial indicators are the number of years a hospital has been operating with a negative margin and the amount of net patient revenue.
By the numbers: Overall, 43% of America’s rural hospitals have a negative operating margin. At the same time, 51% of rural facilities in states that have not implemented Medicaid expansion are in the red.
The other key indicators include:
- The average number of inpatients during the year.
- The average daily need for skilled nursing facilities.
- The hospital’s reliance on inpatient revenue.
- Its share of Medicare outpatient charges.
- Each hospital’s case mix index.
Why it matters: Unfortunately, deaths of despair and higher mortality rates are becoming more common in rural regions. The analysis shows rural hospitals are under financial stress and cutting services.
“Care desserts” are popping up in large swaths of states and regions where rural hospitals remain open. Over the last several years, Chartis has tracked the disappearance of specific medical care in rural communities—most notably maternal care and cancer treatments.
- 217 rural communities no longer have access to OB/GYN care
- 353 have lost access to chemotherapy
What they’re saying: “As the urgency of the pandemic disappears, the return of policy-driven reimbursement cuts, population health disparities and the nurse staffing crisis will apply renewed pressure to the rural health safety net,” said Michael Topchik, national leader of The Chartis Center for Rural Health.
What’s an REH Designation
Chartis’ new report aimed to determine the potential impact of the Rural Hospital Emergency (REH) designation. Congress enacted it in Dec. 2020 to ensure emergency medical services in rural hospitals that may lack the resources to offer them.
“For some hospitals, our data model suggests the REH designation will serve as a desperately needed relief valve to avoid closing and provide a significant reversal in fortune for the vulnerable communities they serve,” Topchik said in the release. “But the decision to convert is highly nuanced, and as a result, we expect to see a relatively small number of hospitals embrace REH.”
Go deeper: read the full study on the rural hospitals risk of closing at chartis.com.
