- The negative consequences of a rural hospital closure extend beyond access to timely, essential medical care and often affect the long-term employment prospects and population growth of a community, according to new research from the University of North Carolina at Chapel Hill.
- The analysis of 1,759 non-metro counties from 2001 to 2018 tracked 109 hospital closures, corresponding with an average 1.4% decline in the local labor force. In counties that saw the closing of a hospital in the Medicare Prospective Payment System, the average population size decreased by 1.1% compared with communities without a closure.
- Hospital shutdowns also appeared to weigh on annual income in rural communities, though the slight declines in counties affected by closures in the study were not statistically significant, the study said. Researchers found that the economic shock of a rural hospital closing could be cushioned through conversion to another type of healthcare facility offering services other than inpatient care.
Rural hospitals have struggled financially for years, prompting the closure of 101 such facilities from January 2013 through February 2020 alone, according to one federal government report. The result is longer travel times for local residents to access common medical services and a decline in the number of healthcare professionals in those counties.
Elderly and low-income patients are among those particularly hard hit when a rural hospital closes. A drop in the number of people seeking inpatient care and reductions in reimbursement are among the reasons cited for financial pressure on rural hospitals.
A 2020 study from the Center for Healthcare Quality and Payment Reform found that 40% of all rural hospitals were at immediate risk of closing even before the COVID-19 pandemic added to their woes because of large financial losses over multiple years or high dependence on local taxes or state grants.
The pandemic exacerbated the distress, resulting in the closure of 19 rural facilities countrywide in 2020, the University of North Carolina's Cecil G. Sheps Center for Health Services Research has reported. Two more rural hospitals closed in 2021 and one facility shut this year.
In the latest study from the University of North Carolina, the researchers determined that the negative economic effects of rural hospital closures appeared worse for communities with facilities in the Prospective Payment System and were mitigated when the closed hospital was converted to another type of healthcare facility that continued to provide services other than inpatient care.
"Hospitals, policy makers, and rural stakeholders should consider conversion as an alternative to complete closure, as it could mitigate the economic shock on the surrounding community and protect access to important health services," they wrote in the report.
During the pandemic, hospitals received a lifeline in the form of funding from the 2020 CARES Act, with rural providers getting additional support through the American Rescue Plan. The Rural Hospital Support Act introduced in Congress last year proposed additional relief.