Policy experts say 10 rural hospitals in Virginia are 'at risk' of closure. What does that mean?

A rural hospital can be listed as 'at risk' and never close.
(Canva photo via Cardinal News)

As rural hospitals across the U.S. grapple with fewer federal Medicaid reimbursement dollars, some, including 10 in Virginia, have been flagged as "at risk" of closure, reports Emily Schabacker of Cardinal News. But the formulas used by policy centers to determine financially strained hospitals can't predict which hospitals will close.

For instance, the Public Citizen, a non-profit that tends to lean left, released an analysis that looked specifically at "Medicaid policy changes tied to the federal funding bill," Schabacker explains. Based on their focus, Public Citizen policy experts "identified 10 Virginia hospitals as at risk of closure," including six in Southwest and Southside Virginia:

• Buchanan General Hospital, Grundy
• Carilion Tazewell Community Hospital, Tazewell
• Twin County Regional Hospital, Galax
• Dickenson Community Hospital, Clintwood
• Sentara Halifax Regional Hospital, South Boston
• Centra Southside Community Hospital, Farmville
• VCU Health Tappahannock Hospital, Tappahannock
• Bon Secours Southern Virginia Regional Medical Center, Emporia
• Sentara Northern Virginia Medical Center, Woodbridge
• VCU Health Community Memorial Hospital, South Hill

While not all policy centers will focus on Medicaid payment changes to determine a hospital's future financial difficulties, most centers will consider past financial standing, operating margins, and whether the hospital was already operating at a deficit before the Medicaid cuts were announced. 

According to Michael Shepherd, an assistant professor with the Department of Health Management and Policy at the University of Michigan, "Each research group uses slightly different methods to evaluate hospital finances," Schabacker reports.

Shepherd said he’s "concerned that reports like the one from Public Citizen border on being alarmist," Schabacker adds, "signaling with too high a degree of certainty that hospitals with negative operating margins will close as Medicaid changes take shape."

Financial vulnerability doesn't mean that "the hospital is going to close tomorrow, but it could over the next few years," Shepherd told Cardinal News. "There is some uncertainty there. Not every hospital that’s at risk of closing will close. The truth is somewhere in the middle.”