Rural hospitals are closing at a faster pace


A study shows half of all rural hospitals are losing money

If you live in a rural area of America, your healthcare options are shrinking.

A new report from Chartis, a healthcare advisory firm, shows that 50% of the nation’s rural hospitals are operating at a loss and 418 are vulnerable to closure.

“America’s rural hospitals have been battling against drivers of instability for more than a decade, but this newest research suggests this crisis has accelerated quickly to previously unseen levels,” said Michael Topchik, national leader of the Chartis Center for Rural Health. “To learn the percentage of rural hospitals in the red has shifted 7% and now includes half of all rural hospitals is startling and should serve as an urgent call to action for everyone invested in rural healthcare.”

It costs a lot to operate a hospital and successful facilities require scale, meaning they need to serve a lot of patients. In rural areas, there often are not enough people to cover operating costs. But Val Mignogna, senior vice president of Clinical Operations at Gloria Gates CARE, sees other issues.

“Failure of reimbursement levels to keep up with the increase in costs, particularly labor and specifically nurses which are the key to the operation of all hospitals,” Mignogna told us.

Hiring is a problem

He also says rural hospitals face challenges in recruiting and retaining physicians. Dr. Bradley Serwer, an Interventional cardiologist and chief medical officer at VitalSolution a company that offers cardiovascular and anesthesiology services to hospitals nationwide, sees four reasons rural hospitals are closing their doors.

“A large percentage of rural community hospitals are losing money on an annual basis,” Serwer told ConsumerAffairs. “Reimbursement for inpatient hospitalization is not sufficient to cover expenses. Hospitals are monetarily penalized for readmitting patients within 30 days of their initial discharge. Many times, these readmissions occur due to a lack of sufficient resources to care for patients in their homes.”

He says other issues include difficulty in recruiting healthcare professionals, declining quality of care and a lack of community support. 

Is there an answer?

Sean Marchese, a registered nurse at The Mesothelioma Center, says rural hospitals have to find a way to overcome these issues. Part of the answer, he says, may lie in specialization.

“In the short term, rural hospitals can develop specialized programs for rare diseases and cancers that incentivize patients to travel for unique treatments and care,” Marchese said. “These services would also benefit local rural populations by providing sources of income that hospitals can funnel back into primary care services or local support programs."

Serwer says rural hospitals need creative staffing models that promote work-life balance, incentivize high-quality health care delivery, and reward those willing to help build and grow programs. 

Time is of the essence. The Chartis report found a record 28 rural communities lost access to inpatient care last year as a result of rural hospital closures or conversion to a model excluding inpatient care.

The report also found that 267 rural hospitals—nearly 25% of America’s rural obstetrics (OB) units—dropped OB services between 2011 and 2021.

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