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The cascading health and economic impacts of hospital closures on rural communities

According to The University of North Carolina’s Rural Health Research Program, 89 hospitals in rural areas across the country have closed since 2010, most of them located in the Southeast United States. The Chartis Center for Rural Health and iVantage Health Analytics reported that 673 hospitals were vulnerable to closure in 2016.

A hospital hallway (Source: cezjaw, pixabay)
A hospital hallway (Source: cezjaw, pixabay)

Hospital closures in rural areas can create healthcare or hospital “deserts” in which rural patients need to travel long distances to make it to the nearest hospital. In a June report, the Medicare Payment Advisory found that of the 51 rural hospitals closed since 2013, 23 were more than 20 miles from the nearest hospital.

Having a longer trip to the hospital can have life-risking implications, especially during an emergency,  and may have other health implications for patients by limiting access. The Kaiser Commission on Medicaid and the Uninsured found that longer travel times and distances encouraged the delaying or forgoing of care, particularly among elderly and low-income people. However, studies also acknowledge that some closures may be beneficial by shifting patients from a struggling hospital with a lower quality of care to a larger hospital with a higher quality, or by shifting patients to local physician offices or clinics for primary care.

Hospital closures can have other cascading impacts on the community it serves. Hospitals are often one of the largest employers in a region, so the closure of a hospital can have a lasting impact on the local economy. Compounding the issue of losing jobs, losing a hospital can make it more difficult to attract new employers, especially those that have provisions requiring access to a nearby hospital emergency department. Hospital closures can also cause shortages of health practitioners. As hospitals close, practitioners who were employed by it or who clustered around it tend to leave. Specialists who visit rural hospitals for outpatient visits are also often no longer be able to see patients there once they close, exacerbating already significant rural issues such as gaps in mental health care and substance use treatment. 

Some of the reasons for rural hospital closings include a decrease in people living in rural areas, a decrease in the need for inpatient services, failure to recover after the 2008 recession, and other market or financial trends. The Chartis Center for Rural Health reported that 44% of rural providers have a negative operating margin. At least part of this is due to higher rates of uninsured people in rural areas. Several studies have correlated higher rates of closure in states that did not decide to expand Medicaid as a way to reimburse uncompensated care.

Some hospitals have turned to mergers or joining regional health groups to continue providing service in rural areas. However, there are concerns that consolidation may drive up prices without increasing quality of care. As rural hospital closures can have serious implications for access to healthcare, creative solutions will be needed to address this gap. 

 

Sources and Further Readings

89 Rural Hospital Closures: January 2010 – Present – University of North Carolina Rural Health Research Program

Rural Hospital Closures – National Rural Health Association

Medicare and the Health Care Delivery System – Medicare Payment Advisory Commission

How far to the hospital?: The effect of hospital closures on access to care – Journal of Health Economics

A Look at Rural Hospital Closures and Implications for Access to Care: Three Case Studies – The Kaiser Commission on MEdicaid and the Uninsured,

A Sense of Alarm as Rural Hospitals Keep Closing – The New York Times

Rural Hospital Closures – United States Government Accountability Office

Research Update: Policy Implications for the Rural Health Safety Net – The Chartis Center for Rural Health

America’s Rural Hospitals Are Dangerously Fragile – The Atlantic