Rural hospital financial woes pose barriers to access to care

March 20, 2024

Source: Topchik, M et al “Unrelenting Pressure Pushes Rural Safety Net Crisis into Uncharted Territory” Chartis, February, 2024 LINK

Since 2011, 167 rural hospitals have closed or ceased inpatient operations, and 267 additional rural hospitals have stopped performing deliveries. There are about 1800 rural hospitals left in the US. Most of them are nonprofit (56%); about one-third (34%) are owned by public authorities, and about 10% are investor-owned. More than half ran a deficit in the last fiscal year, and over 40% are at significant financial risk of insolvency.

It’s not easy to run and staff a rural hospital. Poorer and aging residents of rural communities are more likely to be on Medicare and Medicaid, which pay lower fees than commercial health plans. Some states have not expanded Medicaid, which leads to higher rates of bad debt. And it’s hard to attract physicians and other professional staff to rural communities that don’t have the amenities of bigger cities and suburbs, and often don’t have available jobs for spouses.

 Implications for employers:

-        Coverage of virtual care can provide some relief to rural health deserts, but can’t substitute for inpatient care, chemotherapy, and maternity services. Intensivists can provide some coverage of intensive care beds, although small rural hospitals often must transport patients for ICU care.

-  Navigation programs can help rural members identify sources of care that are least inconvenient, but as rural hospitals fold, travel benefits become more important to residents of these communities.

-  Birth centers sometimes can provide a lower-intensity alternative for rural delivery services, although many states have erected barriers to these centers.

Thanks for reading.  You can find previous posts in the Employer Coverage archive

Please subscribe, “like,” and suggest this newsletter to friends and colleagues. Thanks!

Tomorrow: AI for the eye