Lawmakers, Rural Hospitals Seek To Address Financial Challenges
Many rural hospitals face financial challenges that put them at risk for closure, and hospital operators, as well as lawmakers, are considering strategies to address the issue, Modern Healthcare reports.
Across the U.S., 51 rural hospitals have closed since 2010, according to the North Carolina Rural Health Research Program at the University of North Carolina at Chapel Hill. Further, the number of closures has increased each year during the time period. According to Modern Healthcare, the increase has affected southern states disproportionately.
Meanwhile, 283 rural hospitals have been identified as at risk for closure by the National Rural Health Association. The figure represents more than 10% of all rural hospitals. According to the association, in 2013, more than one-third of rural hospitals were operating at a deficit. North Carolina Rural Health Research Program Director Mark Holmes said that many rural hospitals "have been struggling on the cusp for a long time."
Reasons for Closures
There are several potential reasons for the financial challenges facing rural hospitals, including:
- States' decisions not to expand Medicaid eligibility under the Affordable Care Act;
- Decreases in Medicare reimbursement rates;
- Wariness of adopting more risk-based payment models; and
- Challenges that come with being rural facilities, such as difficulties recruiting the most-talented professionals, an inability to benefit from economies of scale and a disproportionate share of uninsured patients and Medicare or Medicaid beneficiaries.
Reversing the Trend
Some states have sought to address the issue. For example, a committee appointed by Georgia Gov. Nathan Deal (R) has sought to provide relief to rural facilities that face challenges offering a full range medical services that can prove costly. The committee has suggested:
- Making larger regional hospitals communication hubs that point patients in a rural network toward the most appropriate care locations; and
- Offering more ambulances and school clinics with teleconferencing capabilities to connect individuals with medical experts.
In addition, Sen. Chuck Grassley (R-Iowa) is developing legislation that would give rural hospitals greater financial security. The plan would create a new Medicare payment track for rural facilities that offer only outpatient and emergency care. Such a strategy is being tested among some rural hospital operators, according to Modern Healthcare (Demko/Kutscher, Modern Healthcare, 5/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.