The Dwindling of Rural Hospitals Nationwide

by / 1 Comment / 222 View / July 8, 2015

There has been an ongoing topic of concern in our country.

Welcome to rural America, where hospitals are—and have been—struggling to survive.

For example, earlier this year on March 31st, Parkway Regional Hospital in Fulton, Kentucky closed its doors after operating for over two decades and serving the people in the southwestern region of the state. Despite employing nearly 200 residents and accounting for a whopping 18% of the town’s tax base, the hospital was no longer deemed as being economically viable after inpatient admissions had gradually slumped over the past four years.

Thousands of people spread across the country—and primarily based in the countryside—have depended on these facilities for basic access to quality healthcare. Whom do these people turn to, now? To them, receiving healthcare has now become an obstacle instead of a basic amenity.

And these aren’t the only consequences. Several regional economies are also being dealt major blows, as a result. Poor financial health has been cited as a factor behind these closures. And these financial problems plaguing rural hospitals have many causes. The unwillingness so far of 21 states, disproportionately in the South, to expand Medicaid to low-income adults under the Affordable Care Act is a major factor. Roughly three-quarters of the 51 rural hospital closures nationally since 2010 have been in states that didn’t expand Medicaid.

Let’s take a moment to pause here and reread the previous sentence. 51 rural hospitals, in a span of just 5 years! That’s an alarming amount, especially considering the vitality of these healthcare facilities to their surrounding regions. Furthermore, the National Rural Health Association has identified 283 more rural hospitals across the United States in jeopardy of shutting down operations. What’s more shocking is that these 283 hospitals represent more than 10% of all such facilities.

Another dynamic contributing towards this issue is overall reductions in Medicare payment rates. In particular, the budget sequester cuts that Congress passed in 2013—reducing rates by 2% across the board—have caused significant problems. This can be attributed to the fact that most rural facilities were already operating on thin margins and they typically have a larger share of Medicare enrollees in their patient mix than other hospitals.

It may be true that some of these challenges that rural hospitals face are inherent in being rural. Because they are smaller facilities, they are typically unable to take advantage of economies of scale that usually reduce costs. In addition, attracting top-tier talent is challenging in rural communities; hence they often must pay more to land such healthcare professionals. They also tend to have a disproportionate share of patients who are Medicare-dependent, Medicaid-dependent, or uninsured.

However, there are ways in which we can try and reverse this trend:

1) Carefully select larger rural healthcare facilities, and make them communication hubs that would then direct patients in a rural network to the most appropriate places for care. This, arguably, may even increase the efficiency of healthcare treatment and delivery, as some patients with significant ailments and issues would receive diagnosis and treatment quicker than they usually would: the usual meaning they would visit their local physician first, who would then recommend them to visit a larger rural hospital), followed by a larger rural hospital, and finally a mainstream hospital or more specialized care center.

2) Set up telemedicine facilities in larger rural and mainstream hospitals. This would create a medium through which the patients’ questions and concerns (on one side of the TV) can be addressed by a physician on the other end of the screen—only to a certain extent, of course. In addition, these capabilities can be installed in a larger number of ambulances and school (or local) clinics, to further alleviate the problem.

Going forward, the main goal to be kept in mind is to provide relief to rural facilities that face great difficulty offering the full range of expensive medical services. Hopefully in the coming years, the appropriate changes will be made, and restore the basic privilege of healthcare access that so many rural citizens have been stripped of.


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