432 Rural Hospitals Vulnerable to Closure, Chartis says
Over the last year, 18 rural hospitals closed or converted to an operating model that excludes inpatient care, according to a new analysis from the Chartis Center for Rural Health. That brings the total since 2010 to 182. Chartis analysts say that 46% of rural hospitals have a negative operating margin, and 432 are vulnerable to closure.
Chartis noted that states suffering the greatest loss of inpatient care since 2010 are Texas (26) and Tennessee (16). Georgia, Kansas, Mississippi, Missouri, and Oklahoma are tied for third as each state has lost inpatient care in 11 communities. The loss of inpatient care is generally highest across the South from the Carolinas to Texas and then up into the Midwest. States along the Rockies and the Pacific Northwest have thus far avoided falling into this inpatient care desert.
Chartis’ loss of inpatient care analysis includes facilities opting for the Rural Emergency Hospital (REH) designation because conversion requires hospitals to stop providing inpatient care.
Nationally, 32 rural hospitals have converted to REH since January 2023. Last year’s conversion total (17) was slightly lower than the 19 in 2023. Chartis’ analysis of REH and the likelihood of rural hospitals to pursue conversion shows that about 400 facilities are “most likely” to consider REH, with 77 identified as prime candidates for the new designation.
The potential loss of access to care is compounded by rural America’s weakening population health status and expanding “care deserts” for services such as obstetrics (OB) and chemotherapy.
Their research reveals that between 2011 and 2023, 293 rural hospitals stopped providing OB services. This represents 24% of the nation’s rural OB units. Rural OB deserts now stretch across vast stretches of rural America and heighten the stakes in the event of a medical emergency and potentially impact prenatal and newborn care as well.
Florida and Pennsylvania had the highest percentage of rural hospitals that stopped offering OB during our review period at 57% and 42%, respectively. Across the country, 11 states lost 10 or more OB units during our review period. Based on the data, Iowa saw the largest decline in state-level rural OB units, losing care at 22 facilities, followed closely by Minnesota (19) and Kansas (17).
For the more than 46 million people who live in rural areas, the rapid deterioration of access to care and persistent financial strain raise pointed questions about the safety net’s ability to continue to meet the needs of these communities in the future.
“Our analysis of population health domains indicates that rural hospitals will be challenged to meet the needs of vulnerable communities in the years ahead,” said Michael Topchik, executive director of the Chartis Center for Rural Health, in a statement.
The report also addressed the impact of reimbursement policies. Government policies such as sequestration and bad debt reimbursement continue to place added pressure on rural hospital revenues. According to Chartis’ analysis, the 2% cut in Medicare reimbursement under sequestration will cost rural hospitals more than $509 million this year and result in over 8,000 jobs lost. States such as California ($27 million), Minnesota ($23 million), Texas ($22.8 million), and New York ($22 million) will be hit hardest by sequestration’s impact on rural hospital revenue.
Bad debt reimbursement is a 35% reduction in reimbursement for charity care. It will chip away another $159 million in rural hospital revenues and nearly 2,700 jobs in 2025.
The report did point to a few interesting innovations taking place across the country, including the Innovation for Maternal Health Outcomes in Minnesota (I-MOM) initiative, which is improving outcomes in communities experiencing the highest rates of disparities, including rural communities. In rural New York, the University of Rochester Medical Center launched an initiative last year to improve access to care through telehealth stations in banks.
