About one rural hospital per month has closed since 2010; independents are at highest risk; CBS takes a long look

A young staff of physicians trained in full spectrum family medicine
work at Kearny County Hospital in Lakin, Kansas. (CBS image)

The featured story on CBS's "Sunday Morning" yesterday was about the closure of rural hospitals, and the 14-minute piece offered a fresh number from the continuing study by the University of North Carolina: 99 hospitals in the rural United States have closed since 2010 – almost one per month – and many of the ones still open are in financial trouble.

"Basically about half of rural hospitals are losing money every year," said Mark Holmes, a professor of health policy and management at UNC-Chapel Hill. CBS Correspondent Lee Cowan asked him, "Is there an end in sight?" Holmes replied, "Every time that I've said, 'I think we're through the worst of it,' we've been surprised. You always have to wonder, who's next?"

The reasons for rural hospital closures vary: loss of population, mismanagement, mergers and lack of Medicaid expansion. Holmes said expansion would have helped some stay open, but reimbursement rates are often so low that hospitals can't break even, Sari Aviv reports for CBS.

So many rural hospitals have eliminated maternity units to save money and reduce risk of lawsuits "that more than half the rural communities in this country now no longer have labor and delivery units, leaving expectant mothers facing long drives at the worst of times," Cowan reported. "But in Lakin, Kansas, population 2,200, they tried something different. The only hospital for miles decided to invest in obstetric care instead, the thinking being that babies can be a growth industry. They get patients in the door, and just as Kearny County Hospital's young CEO, Ben Anderson, had hoped, they stay … and bring along the rest of the family, too. There are no high-priced specialists employed here, not even an OB-GYN. Instead, the hospital is staffed entirely by physicians trained in full spectrum family medicine instead." Anderson said, "This last year we had the first profitable year in probably two or three decades, but we're riding very, very close. We don't have the margin for mistakes."

A recent report from business analysts Navigant Consulting estimated that 21 percent, or 430 across 43 states, are at high risk of bankruptcy or closure. "The states with the highest percentage of rural hospitals at risk are Alabama at 50 percent, Mississippi at 48 percent, Georgia at 41percent, and Alaska and Maine at 40 percent," Alex Kacik reports for Modern Healthcare. "Rural stand-alone hospitals are most at risk, with 60.5 percent having lost money on an operating basis in each of the past five years, compared with 42 percent of their urban counterparts."

Independent hospitals are most at risk because they can lose patients to medical facilities like nursing homes or hospices after acute treatment is no longer needed. Independents have increasingly relied on longer patient stays: "The average weighted length of stay at stand-alone hospitals rose by 6.4 percent between 2012 and 2017 while the average length of stay at system-based hospitals fell 23.5 percent, meaning independent hospitals are reliant on fewer patients staying longer," Kacik reports. "Stand-alone hospitals saw their occupancy rates fall to 43.6 percent in 2017 from 53.9 percent five years earlier, while system hospitals saw their occupancy rates fall to 53.7 percent from 61 percent."