At least 40% of rural U.S. hospitals are at risk of shutting down in the near future, according to a new study from the Center for Healthcare Quality and Payment Reform (CHQPR)—a situation that could potentially leave millions in smaller, less affluent communities with no access to nearby emergency and critical care facilities.

Defining what it means to be a best-in-class rural health system

Study details and key findings

For the study, researchers analyzed publicly available data to evaluate rural hospitals' finances over a three-year period, according to Harold Miller, CHQPR's CEO and author of the report.

In the analysis, researchers identified more than 500 hospitals at immediate risk of closing in the next two years, largely because of significant, multi-year financial losses. In addition, they found that more than 300 other hospitals are at high risk of closing because of low funds or high dependency on state grants and local taxes.

In total, there are roughly 38 million Americans in the areas at risk of these hospital closures. If these rural hospitals close, patients living in rural areas would have to drive at least 20 minutes farther to reach emergency care—and around half of them would be at least 30 minutes farther from care, according to Miller.

Notably, many rural hospitals are the only provider of health care services in these communities, including laboratory testing, maternity care, rehabilitation, and even primary care. Unfortunately, when these facilities close, their surrounding communities often lose access to all nearby health care services.

Rural hospital closures also have ramifications beyond the surrounding communities, according to the report. For instance, most of the nation's food supply comes from rural communities, and the workers and families in those areas depend on rural hospitals for health care services. The Covid-19 pandemic underscored how health problems in farming communities can trigger food shortages in urban areas.

"The myth is that these are hospitals that should no longer exist in communities that should no longer exist," Miller said.

According to the study, keeping at-risk rural facilities open would cost around $3.4 billion— which would increase national health care spending by about 1% annually. In contrast, if these rural hospitals are allowed to close, spending would likely increase even more because of increased health problems among rural residents who have lost access to preventative care and adequate treatment.

Further, the study found that the most recent federal proposal, CMS' Community Health Access and Rural Transformation (CHART) model, won't adequately address the issues facing small rural hospitals—and could even make the problem worse in some instances. 

For example, if small rural hospitals are required to eliminate inpatient services, it would likely increase financial losses at most hospitals and reduce access to care for residents. In addition, the CHART model would increase financial losses at rural hospitals by reducing their Medicare payments. Ultimately, researchers found that any short-term financial assistance likely won't solve the long-term issues many rural hospitals face.

According to Kaufman Hall chair Kenneth Kaufman, the system needs more coordinated planning to ensure access to care in all communities. "We have a reimbursement problem of course, but we also have a structural problem," Kaufman said. "There's just not enough patients to sustain a lot of these hospitals." 

For his part, Miller suggested that insurers fund rural hospitals through monthly payments in addition to reimbursement for services in a system that mirrors other public services. "We don't pay the fire department based on the fire," he said. (Coleman-Lochner, Bloomberg, 3/9; Center for Healthcare Quality and Payment Reform study, accessed 3/10)