- More rural hospitals could fail if lawmakers replace the ACA with a plan that reduces Medicare and Medicaid funding, on which they heavily rely.
- According to a new study by Health Management Partners, Medicare and Medicaid patients account for 63% of rural hospitals’ volume, compared with 49% at urban hospitals.
- Meanwhile, Green Valley Hospital in Arizona filed for bankruptcy in federal court in Tucson, less than two years after it opened, tucson.com reports. Officials attributed the Chapter 11 filing to “turmoil and financial mismanagement,” as well as a hospital assessment imposed when the state expanded its Medicaid program. No layoffs are planned, and the hospital will remain open.
Since 2010, more than 75 rural hospitals have closed and 673 more are vulnerable and could close, according to the National Rural Health Association. Together, that amounts to more than one-third of rural hospitals. Cuts in reimbursement for bad debt have been particularly hard on rural hospitals, which often have very narrow operating margins. On top of lower patient volumes, they tend to have poorer, older and sicker patients than their urban counterparts.
In February, Sen. Johnny Isakson (R-GA) introduced legislation to correct a flawed payment formula that results in disproportionately low Medicare reimbursement rates to hospitals in rural and low-wage areas. It would do so by establishing a national minimum area wage based on the relative hospital wage level in a geographic area compared to the national average. An identical bill was introduced in the House.
Rural hospitals are a vital link for the frail and elderly, who may not have the means to travel long distances for medical care. According to the Centers for Disease Control and Prevention, rural Americans are at higher risk of death from heart disease and cancer, in part due to the decrease in health services as more rural hospitals have closed.
But it’s not just rural hospitals that are risk. A recent report by the Massachusetts Health Policy Commission concluded that community hospitals in general are facing hard times as more patients seek routine care at large teaching hospitals, where they think they will get higher quality care. Of 115 community hospitals in Massachusetts since 1980, nine have closed and 22 more have been repurposed as non-hospital facilities.
Rural and community hospitals aren’t just important for patients. They’re a major source of revenue for local economies, providing jobs and drawing restaurants, motels and other types of business to the community.