Rural Hospital Closures: How COVID-19 Impacted Hospitals

Tables of Contents

  1. Hospital Closures Across the U.S. from COVID-19
  2. What Is a Rural Hospital?
  3. Why Are Rural Hospitals Closing?
  4. U.S. Hospitals: Closing Statistics
  5. What Rural Small Town Hospitals Can Do to Survive
  6. Rural Hospitals: A Vital Healthcare Provider Working to Overcome COVID-19 Challenges

Hospitals and different healthcare services are vital to the American inhabitants — and the economic system.

In 2018, U.S. hospitals and well being methods provided emergency care to 143 million people, carried out greater than 28 million surgical procedures, and delivered almost 4 million infants, in accordance with the American Hospital Affiliation (AHA). The Facilities for Medicare and Medicaid Companies (CMS) experiences that in the identical 12 months, healthcare represented about 18% of the U.S. economy.

Nonetheless, a spate of hospital closures, exacerbated by COVID-19, is leaving too many individuals with out handy entry to healthcare and too many communities with out an necessary financial driver. Rural communities — which account for 46 million people, in accordance with the Facilities for Illness Management and Prevention (CDC) — are bearing the brunt of this healthcare development.

The outcome: new considerations about rural hospital closures.

Hospital Closures Throughout the U.S. from COVID-19

Hospital numbers have been already declining because the U.S. approached the guts of the COVID-19 pandemic in 2020. In 2019, the U.S. had 6,090 hospitals, 56 fewer than the earlier 12 months, in accordance with the AHA. Equally, 2018 noticed 64 fewer hospitals than the year before.

When COVID-19 hit, this already-concerning state of affairs grew to become dire. Bloomberg reported that greater than three dozen U.S. hospitals had already gone bankrupt by the autumn of 2020. No less than 30 hospitals met the same fate in 2019.

The rise in hospital closures was particularly profound in rural communities, with a metropolis supervisor in Bowie, Texas, telling Bloomberg that rural hospitals have been “closing proper and left” in 2020.

The number of all hospitals, and specifically rural hospitals, fell between 2018 and 2019.

Heading into the COVID-19 pandemic, the U.S. was already experiencing a drop within the variety of hospitals, in accordance with American Hospital Affiliation knowledge. In contrast with fiscal 12 months 2018, fiscal 12 months 2019 noticed a 9% decline in rural and different hospitals. The variety of hospitals in fiscal 12 months 2018 was 6,146, in comparison with 6,090 in 2019. The variety of rural hospitals in fiscal 12 months 2018 was 1,821, in comparison with 1,805 in 2019.

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COVID-19’s results on hospitals could not finish with the pandemic. A 2021 Kaufman Corridor research confirmed that the pandemic may lead hospitals to losses of between $53 billion and $122 billion throughout the 12 months, relying on how the pandemic progresses.

Challenges Dealing with U.S. Hospitals

Modifications in insurance coverage and affected person demographics are among the many causes hospital closures have been a priority in recent times, each earlier than and throughout the pandemic. Following is a have a look at a number of the forces at work in these closures.

Hospital Consolidations

Hospital mergers and acquisitions over the previous twenty years have created large hospital systems that usually cater to well-insured sufferers. These hospitals, usually positioned in city areas, can cost increased costs, whilst smaller hospitals battle to cowl rising bills.

Altering Demographics

Demographic shifts have been inserting higher calls for on hospitals in recent times. The world’s population is getting older, inserting further stress on hospitals as they take care of persistent circumstances. Moreover, Brookings reported in 2018 that half the world’s inhabitants may very well be outlined as middle  class or wealthier — and people with this socioeconomic standing get pleasure from comforts that may promote a extra sedentary, unhealthy way of life.

Outpatient Care Focus

Deloitte experiences that the healthcare business has shifted towards more virtual care and fewer hospital beds. This development has left medical suppliers to deal with different methods to remain financially solvent, with much less emphasis on in-hospital affected person care and extra emphasis on outpatient companies. Elective procedures and outpatient visits usually present the highest profit margins, however COVID-19 restrictions pressured hospitals to curtail many of those choices throughout the pandemic.

Medicaid Protection Gaps

In July 2021, the Kaiser Household Basis reported that 12 states had not expanded Medicaid coverage as permitted beneath former President Barack Obama’s healthcare regulation: the Inexpensive Care Act (ACA). The ACA expands Medicaid protection for many low-income adults, however states can decide out of this extra protection. In states that select to not undertake this enlargement, low-income people face the prospect of a gap in insurance coverage to obtain healthcare — together with that offered by hospitals, which in flip obtain much less reimbursement.

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What Is a Rural Hospital?

As hospitals typically grapple with the monetary implications of COVID-19 and different challenges, rural hospitals are feeling the consequences much more acutely. Rural hospital closures are affecting an rising variety of communities.

What’s a rural hospital, precisely?

Outlined broadly, a rural hospital is positioned exterior a metropolitan space. As a result of rural hospitals are sometimes the only sources of healthcare in a community, they have a tendency to offer extra companies than city hospitals do. Rural hospitals usually present a continuum of care, from major care to long-term medical help, and are sometimes among the top employers in the community.

What Defines Rural?

Totally different U.S. authorities entities — together with the U.S. Census Bureau, the Workplace of Administration and Price range (OMB), and the Federal Workplace of Rural Well being Coverage (FORHP) — have totally different guidelines for defining rural populations.

The federal authorities has two principal units of standards for what defines rural: these from the U.S. Census Bureau and the OMB. The FORHP considers components from each companies’ definitions when figuring out eligibility for federally funded companies for rural healthcare.

U.S. Census Bureau Definition of Rural

The U.S. Census Bureau doesn’t specifically define rural areas, however fairly considers areas that don’t fall beneath its definition of city to be rural populations. The U.S. Census Bureau defines city clusters as these of at the least 2,500 individuals.

Workplace of Administration and Price range Definition of Rural

The OMB additionally classifies counties in accordance with inhabitants, and it considers any county not categorized as a part of a metropolitan space to be rural. The OMB considers metropolitan areas to be these with a inhabitants of fifty,000 or extra individuals in a core city space.

Federal Workplace of Rural Well being Coverage Definition of Rural

The FORHP classifies all nonmetropolitan counties as rural. To guage whether or not a rural neighborhood is eligible for federal applications, the FORHP additionally considers different census-based standards, resembling these figuring out rural-urban commutes. The Well being Sources & Companies Administration (HRSA) gives a software to find out whether or not a county is rural under FORHP guidelines.

Classes of Rural Hospitals

The Rural Well being Info Hub (RHIhub) offers details about the hospital designations and provider types from the Facilities for Medicare & Medicaid Companies (CMS). The next CMS designations give sure suppliers particular consideration for federal insurance coverage reimbursement:

  • Critical access hospital. A CAH homes not more than 25 acute care beds and is positioned greater than 35 miles (or 15 miles of mountainous terrain or roads) from the closest hospital.
  • Rural referral middle. An RRC receives referrals from a close-by rural acute care hospital.
  • Sole neighborhood hospital. A SCH meets distance standards indicating the power is the one hospital of its sort serving a neighborhood. Distance necessities differ in accordance with the hospital’s rural standing and the way accessible it’s (based mostly on elements resembling terrain and climate).
  • Low-volume hospital. A LVH is a facility with fewer than 3,800 affected person discharges within the earlier 12 months that’s positioned greater than 15 miles from the closest acute care hospital.
  • Medicare-dependent hospital. An MDH incorporates 100 or fewer beds, and at the least 60% of its affected person inhabitants is insured by Medicare.

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Factors affecting rural hospitals.

COVID-19 is the most recent in a bunch of challenges dealing with rural hospitals within the U.S. Different challenges embrace the next, in accordance with the American Hospital Affiliation: insurance coverage protection, affected person demographics, geographic isolation, worker recruitment, ageing services, outpatient care emphasis, psychological healthcare wants, regulatory burdens, prescription prices, the opioid disaster, and cyber threats.

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Why Are Rural Hospitals Closing?

At present’s healthcare atmosphere offers challenges which are resulting in rural hospital closures. In 2020, the Heart for Healthcare High quality and Cost Reform (CHQPR) reported that 800 rural hospitals nationwide have been liable to closure. Why are rural hospitals closing?

Points Dealing with Rural Hospitals

In keeping with the AHA, one problem dealing with rural hospitals is that their sufferers are sometimes “older, sicker, and poorer” than nationwide averages, placing higher calls for on the healthcare system. That makes rural hospital closures much more regarding. Following are a number of the further issues that play a role in why rural hospitals are closing.

Low Reimbursement Charges

Rural hospitals are sometimes extra depending on payment from government insurance applications, resembling Medicaid and Medicare, whose traditionally low reimbursement charges could make it troublesome for hospitals to satisfy bills. In addition they serve a excessive variety of sufferers left behind within the shift from a producing economic system, leaving these sufferers both uninsured or underinsured and unable to pay for emergency and different acute care companies.

Decreased Affected person Quantity

Rural populations are declining, down by almost 1,000,000 individuals between 2016 and 2019, in accordance with Macrotrends. This shift leaves hospitals in these rural areas with fewer sufferers to entry their companies, even because the elevated healthcare wants of rural People and the ageing U.S. inhabitants go away individuals in higher want of care.

Elevated Regulation

The decrease affected person quantity of rural hospitals implies that their per-patient value of compliance is increased than that of different hospitals. Adhering to regulatory necessities additionally requires a degree of staffing that many rural hospitals battle to satisfy.

Rural Affected person Demographics

Obesity, diabetes, hypertension, and smoking rates are increased in rural areas, in accordance with a report from PBS. Moreover, the CDC experiences that residents in rural areas usually tend to die from the following conditions:

  • Most cancers
  • Persistent decrease respiratory illness
  • Coronary heart illness
  • Stroke
  • Unintentional harm

The PBS report additionally famous that 95% of rural counties had 100 or extra COVID-19 circumstances per 100,000 residents from August 2020 to February 2021, assembly the factors for being a COVID-19 “pink zone” that the White Home coronavirus process pressure has put forth. In the meantime, the report indicated that many residents who rural hospitals serve lack belief within the medical system.

Rural Hospitals and COVID-19 Prices

Rural hospitals already liable to closing had few monetary reserves to accommodate the calls for of the coronavirus. They have been left scrambling to cowl misplaced income from delayed elective procedures, pay for private protecting tools (PPE), and compensate for a job loss-related drop in entry to medical insurance amongst their sufferers.

Rural Hospital Closings and Neighborhood Influence

Hospital closures may be devastating to rural communities. Following are a number of the results that rural hospital closures could have on communities.

Fewer Choices for Care

Rural hospital closures usually go away an space with little to no close by choices for healthcare. A 2021 report from the U.S. Authorities Accountability Workplace (GAO) confirmed that when rural hospitals closed from 2013 to 2020, individuals dwelling in close by areas needed to travel about 20 miles farther for frequent companies, together with inpatient care. For much less frequent companies, resembling alcohol or drug abuse remedy, residents needed to journey 40 miles farther.

Risks to Well being

The shortage of native care can have severe penalties for rural residents, significantly in circumstances that decision for fast entry to remedy. Pregnant ladies and their infants are amongst these in danger; in 2018, a report in JAMA confirmed an increase in preterm births in rural areas the place the obstetrics models of hospitals had closed.

Enhance in Mortality Charges

Lack of accessible care in rural areas additionally results in increased mortality charges, in accordance with the Nationwide Bureau of Financial Analysis (NBER). The NBER discovered that rural hospital closures resulted in a mortality rate increase of 6% to 9%.

Lack of Tax Income

Communities additionally really feel the affect of rural hospital closings in ways in which transcend well being. The native economic system can take a success as nicely, with closures leaving the native tax base in misery, the neighborhood with fewer extremely educated professionals, and native faculties with a declining variety of college students. Excessive-quality hospitals may also entice different prime corporations to an space, and communities lose that asset when hospitals shut.

U.S. Hospitals: Closing Statistics

Hospitals’ closing statistics paint a troubling image: The AHA experiences 9% annual declines within the variety of rural and different hospitals. The CHQPR signifies that 800 rural hospitals have been liable to closure based mostly on persistent losses and low funding reserves as of Might 2021: 500 (greater than 1 / 4 of rural hospitals within the nation) at instant danger and 300 extra in danger within the close to future.

The states with the greatest percentage of at-risk hospitals.

In almost each state, greater than 20% of rural hospitals are liable to closing, in accordance with the Heart for Healthcare High quality and Cost Reform. The states with the very best proportion of at-risk hospitals are: Connecticut, 100%; Hawaii, 75%; Kansas, 72%; Alabama, 66%; Arkansas, 65%; Mississippi, 62%; Oklahoma, 60%; Texas, 56%; Nevada, 54%; and New York, 54%.

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These hospital closings statistics appear much more daunting contemplating the nation already struggles with healthcare entry. Within the 2019 World Well being Safety Index, the U.S. was ranked No. 175 out of 195 countries for entry to care. In 2020, the Peterson-KFF Well being System Tracker ranked the U.S. under many equally rich nations within the number of hospital beds per capita, with 2.8 hospital beds for each 1,000 individuals. Austria, for instance, had 5.2 hospital beds per capita, and Switzerland and Germany every had 4.3.

What Rural Small City Hospitals Can Do to Survive

Confronted with a number of obstacles and a difficult outlook, what can rural small city hospitals do to outlive? From implementing debt management measures to constructing buyer loyalty, rural hospitals are taking steps to stave off closure and proceed offering worthwhile companies. Following are a number of the measures that rural small city hospitals and hospital organizations are taking.

Bolstering Residency Applications

A 2019 report in Household Medication confirmed that medical residents who practice in rural areas are two to three times more likely to remain in rural small-town areas to follow. Hospitals are rising their variety of residents to reinforce their staffing and improve the provision of healthcare.

Self-Evaluation

To gauge the place they’ll enhance, rural hospitals are conducting thorough evaluations of their funds. These evaluations verify for points resembling outdated methods and billing points.

Encouraging Coverage Modifications

To handle coverage points that may lower rural hospitals’ earnings, hospitals and organizations that characterize them are working to encourage modifications on the federal degree. They’re offering enter on points resembling Medicare reimbursements, regulatory burdens, telehealth protection, and prescription prices.

Figuring out New Income

Rural hospitals are looking for new methods to generate income. They’re working with outpatient healthcare suppliers, for instance, to supply applications resembling psychological well being companies and getting into into revenue-sharing agreements.

Managing Debt

Rural hospitals are in search of methods to deal with their debt. The choices embrace working with debtors and exploring refinancing choices.

Providing Telehealth Companies

To boost entry to care in distant areas and accommodate well being considerations associated to COVID-19, rural hospitals are rising their distant care choices. Along with on-line appointments, hospitals are providing web-based choices for prescription companies.

Strengthening Buyer Loyalty

To capitalize on shopper need to help native companies, rural hospitals are working to advertise their companies of their communities. From sponsoring occasions to enhancing on-line companies, they’re making efforts to develop into extra seen.

Sources for Help with Rural Hospital Challenges

Rural hospitals can flip to on-line sources for help with challenges in areas resembling billing, high quality of care, know-how wants, and COVID-19 response. Following are a few of these sources.

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Rural Hospitals: A Important Healthcare Supplier Working to Overcome COVID-19 Challenges

Rural hospitals are worthwhile property to the well being of their economies, however years of challenges to U.S. hospitals, worsened by the COVID-19 pandemic, have left the nation with a lowering variety of hospitals and a rising variety of rural hospital closures. By way of steps to avoid wasting hospitals and discover cost-efficient strategies for offering care, hospitals are working to make sure that all People have entry to the native care that can enhance rural well being and financial circumstances.

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Infographic Sources

American Hospital Association, “Fact Sheet: COVID-19 Pandemic Results in Bankruptcies or Closures for Some Hospitals”

American Hospital Association, Fast Facts on U.S. Hospitals, 2020

American Hospital Association, Fast Facts on U.S. Hospitals, 2021

American Hospital Association, “Rural Report: Challenges Facing Rural Communities and the Roadmap to Ensure Local Access to High-Quality, Affordable Care”

Center for Healthcare Quality and Payment Reform, “Rural Hospitals at Risk of Closing”