43% of rural hospitals are losing money; besides closing down or going emergency-only, what are their options?

Photo by Jodi Covington, Unsplash

Rural hospitals are seeking ways to survive, and as pandemic money moves out, what are their choices? "One in five rural hospitals is at risk of closing because of shaky finances, and hospitals in states that did not expand Medicaid are at the greatest risk, according to reports that came out last month," reports Liz Carey of The Daily Yonder. "The Chartis Center for Rural Health says that of the nearly 2,200 rural hospitals in the U.S., 453 are financially unstable and at risk of closing. Michael Topchik, national leader for Chartis, said 43% of rural hospitals are operating in the red. . . . To stave off closure, many rural hospitals opted to close departments."

The crisis is still brewing. Topchik told Carey, "In the last couple of years, as we’ve updated the statistics, we’ve noticed what I would call a surge in closures of services. . . . We continue to see hospitals operating with razor thin margin. . . . As the pandemic relief funds have sort of worked their way through the system. Even if the hospital stays open, it doesn’t mean they’re providing the same service they once were.”

Some distressed hospitals are applying for the Rural Emergency Hospital status, which comes with extra federal funding, but means they "would be open for emergency services only . . . . Topchik said a little under 400 hospitals were 'most likely' to consider converting to an REH, but their analysis found that only 77 of the hospitals were ideal candidates for conversion."

What are the options beyond REH? Carey reports, "The Center for Healthcare Quality and Payment Reform, a national policy center that facilitates improvements in healthcare payment and delivery systems, said the solution is to pay rural hospitals enough to cover the cost of delivering services in rural communities. Instead of switching to Rural Emergency Hospital designations, the center argues that small rural hospitals should receive additional 'Standby Capacity Payments' from private insurance companies and Medicaid to cover the extra costs rural hospitals incur. . . Paying rural hospitals enough to cover the expense of delivering services to their communities would cost about $4 billion per year, researchers at CHQPR said, equating to an increase of about 0.1% in national healthcare spending."