Daily Briefing

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Why are 600+ rural hospitals at risk of closing?


report from the Center for Healthcare Quality and Payment Reform (CHQPR) found that over 600 rural hospitals are at risk of closing in 2023, citing persistent financial challenges related to patient services or depleted financial resources.

More than 600 rural hospitals are at risk of closing in 2023

In the report, which was released in January, CHQPR identified 631 rural hospitals — over 29% nationwide — at risk of closing in 2023. However, compared to pre-pandemic levels, fewer rural hospitals are at immediate risk of closing because of the federal relief they received during the pandemic.

Among rural hospitals at risk of closing, CHQPR found two common contributing factors. First, these hospitals reported persistent financial losses of patient services over a multi-year period, excluding the first year of the COVID-19 pandemic. Second, these hospitals reported low financial reserves, with insufficient net assets to counter losses on patient services over a period of more than six years. 

In most states, at least 25% of the rural hospitals are at risk of closing, and in 12 states, 40% or more are at risk.

Meanwhile, more than 200 of these rural hospitals are facing an immediate risk of closing. According to CHQPR, these hospitals have inadequate revenues to cover expenses and very low financial reserves.

"Costs have been increasing significantly and payments, particularly from commercial insurance plans, have not increased correspondingly with that," said Harold Miller, president and CEO of CHQPR. "And the small hospitals don't have the kinds of financial reserves to be able to cover the losses."

How rural hospital closures impact communities

In many cases, the closure of a rural hospital leads to a loss of access to comprehensive medical care in a community. Most of the at-risk hospitals are in areas where closure would result in community residents being forced to travel a long distance for emergency or inpatient care.

"In many of the smallest rural communities, the only thing there is the hospital," Miller said. "The hospital is the only source. Not only is it the only emergency department and the only source of inpatient care, it's the only source of laboratory services, the only place to get an X-ray or radiology. It may even be the only place where there is primary care."

Many small hospitals also run health clinics. "There literally wouldn't be any physicians in the community at all if it wasn't for the rural hospital running that rural health clinic," Miller said. "So if the hospital closes, you're literally eliminating all health care services in the community."

According to Miller, there has to be a fundamental change in the way hospitals are paid. "The problem that hospitals have faced though, is that they do two fundamentally different things — but they are only paid for one of them," Miller said.

"Hospitals deliver services to patients when they are sick, and they are paid for that. But the other thing that hospitals do, which is essential for a community, is that they are available when somebody needs them — that standby capacity is critical for a community. But hospitals aren't paid for that," he added. (Higgs, Cleveland.com, 3/16; CHQPR report, accessed 3/20)


ADVISORY BOARD'S TAKE

Why it is 'not enough' to simply stave off hospital closures

By Abby Burns

This marks the third consecutive year the United States has seen a rise in maternal mortality rates — and many fear that this trend will continue to worsen in a post-Roe world.

Still, the pandemic's role in this increase cannot be overstated. Black, Hispanic, and Indigenous communities experienced the highest rates of COVID-19 deaths, compounding existing maternal health disparities.

However, maternal mortality is a hugely complex issue with many contributing factors. To address rising maternal mortality rates, stakeholders should implement a comprehensive, multi-sectoral approach. Ultimately, every stakeholder in the healthcare industry has a role to play in advancing maternal health.

To improve the maternal health crisis, healthcare leaders need to answer questions related to these four components of maternal health:

1. Delayed and inadequate access to prenatal care: Many Americans, particularly people of color, face barriers to timely and adequate prenatal care — an issue that can result in undiagnosed or poorly managed pregnancy-related complications.

Questions to consider:

  • How can my organization advocate for changes in clinical policy to promote equity and reduce structural barriers to prenatal care?
  • How can my organization partner with community service providers to design initiatives that expand access to maternal health education?

2. C-sections and maternal health complications: The United States has a high rate of C-section deliveries, which are associated with increased risks of maternal health complications, including hemorrhage and infection.

Questions to consider:

  • How can my institution develop an effective strategy to limit unnecessary C-sections and promote vaginal birth?

3. Lack of standardized protocols: There is no standardized protocol for managing pregnancy-related complications in the United States, and healthcare providers may not receive adequate training in managing these emergencies.

Questions to consider:

  • How can my institution improve clinical training to manage pregnancy-related complications?
  • As an industry, what steps can we take to increase health literacy within the birthing population?
  • How can stakeholders improve patient-provider communication and shared decision-making?

4. Healthcare fragmentation: The U.S. healthcare system is fragmented. There are multiple providers, payers, and EHR systems — this fragmentation can lead to challenges coordinating care for pregnant people.

Questions to consider:

  • How can my organization collaborate with stakeholders to advance interoperability and integrated models in care delivery?

The industry has been talking about the maternal health crisis and health disparities for years. The time to stop talking and start acting to address these issues is now.


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