A total of 50 hospitals in the rural U.S. have closed since 2010 and the pace has been accelerating, according to an Associated Press story released Friday which indicates some health care analysts fear it could be the beginning of a crisis. The National Rural Health Association says there have been more closures in the past two years than in the previous 10 years combined.
An additional 283 rural hospitals in 39 states are vulnerable to shutting down, and 35 percent of rural hospitals are operating at a loss, according to iVantage Health Analytics, a firm based in Portland, Maine, that works with hospitals.
Most of the rural hospital closures so far have occurred in the South and Midwest. Of those at risk, nearly 70 percent are in the 21 states that have declined to expand Medicaid under the federal Affordable Care Act, although some experts are hesitant to draw a cause-and-effect correlation.
Nebraska is bucking the trend on both fronts, declining to expand Medicaid and found to have only one rural hospital out of 72 vulnerable to shutting down by the iVantage analysis. By comparison, 102 rural hospitals were studied in Kansas and 17 of them were considered to be vulnerable to shutting down. 16.7 percent of Kansas hospitals studied were vulnerable compared to 1.4 percent in Nebraska.
McCook's Community Hospital CEO Jim Ulrich attributes conservative budget practices as the primary reason Nebraska hospitals have remained financially sound, when other states have waned. During a visit with the Gazette Friday, he said it was a trickle down effect stemming from expectations of a balanced budget placed on state government in Nebraska.
Ulrich said he was familiar with iVantage analytics and wasn't surprised Nebraska faired so well in the report, he also added an assurance that Community Hospital definitely wasn't the lone Nebraska hospital found to be vulnerable.
Although the fiscal landscape for Nebraska hospitals faired well in the analysis, when compared to other states struggling with a significant number of vulnerable locations, Ulrich warned that further cuts to Medicare would make that number bigger.
"Obstacles to access-to-care, at a regulatory level, will drive Nebraska's number up," said Ulrich, adding the decision not to expand Medicaid on a state level has also hurt Nebraska hospitals.
Ulrich said it was important to think about the impact on a community that occurs when a rural hospital must be closed.
He said often times, such as in McCook, the local hospital is one of the larger employers and serves as a significant driver of the local economy.
"This is about the health of not just rural hospitals, but rural communities as well," said Ulrich. Nebraska may only have one location found to be financially vulnerable by the analysis, however, Ulrich said that doesn't mean the state and local economies haven't been affected by cuts to the healthcare system.
Nebraska and Kansas have each closed one rural hospital since 2010. Tilden Community Hospital in Tilden, Nebraska, closed in 2014 and Central Kansas Medical Center in Great Bend, Kansas, closed in 2011.
The closures are part of what the Associated Press article refers to as a growing number of rural U.S. hospitals closing their doors, citing a complex combination of changing demographics, medical practices, management decisions and federal policies that have put more financial pressure on facilities that sometimes average only a few in-patients a day. In some cases, the shuttered hospitals have been replaced by clinics offering urgent care and other outpatient services, other closures have simply left a void.
Similar to Ulrich's comments, the Associated Press article quoted several health care officials raising concerns related to the far-reaching impact of the closures.
"When a hospital closes, the physicians leave. A lot of the health care infrastructure leaves. Sometimes the local businesses will leave ... the schools suffer," said George Pink, deputy director of the Rural Health Research and Policy Analysis Center at the University of North Carolina. "There's a whole multiplier effect that really can devastate some towns."
Big city hospitals have been closing at about the same rate as rural ones during the past five years, but an abundance of alternatives in most major metropolitan areas typically reduces the effect on patients. When a rural hospital closes, people might have to travel dozens of miles to reach the nearest hospital, an inconvenience that can sometimes be a matter of life or death.
Population decline, depressed local economies and changes in inpatient admission guidelines were among factors that have played a role in numerous hospital closures. Rural areas tend to "have older, poorer, sicker populations," said Michael Topchik, senior vice president of iVantage.
That means they often have a higher percentage of patients covered by Medicare and Medicaid, government health care programs that pay a lower reimbursement rate than private-sector insurers. Hospitals that rely heavily on those programs have been particularly hard hit by federal budget cuts and provisions in the 2010 federal health care law that reduced charity care reimbursements and linked a portion of hospitals' Medicare payments to quality standards and readmission rates.
The effects of the federal health care law were the prime factor leading East Texas Medical Center to close three of its 12 rural hospitals last year, said Perry Henderson, the hospital system's senior vice president for affiliate operations.
"The small rural hospitals are the most brittle of the bunch," Henderson said. "When you began cutting on those reimbursements, it hits their margins and pretty quickly drives those hospitals to some pretty significant losses."
The framers of the federal health care law assumed the cuts would be offset as more patients became covered by private insurance and Medicaid. But Texas, which has the nation's highest uninsured rate, is among 21 states mainly in the South and Great Plains that have declined to expand Medicaid eligibility.
The trend also has reached into California, where the booming economy along the coast contrasts with Central Valley agricultural communities that have been devastated economically by years of drought. Many residents remain uninsured or have Medicaid.
After 45 years of providing health care in rural Missouri, Sac-Osage Hospital is being sold piece by piece.
At Sac-Osage, poor management was among the reasons the rural Missouri hospital fell into financial ruin. Some of its doctors, for example, were never approved to be paid by particular insurance companies. And it lost what some staff estimate was $1.5 million to $2 million because the clinic failed to send out thousands of bills to insurers and patients since 2012.
For state Rep. Warren Love, a local cattle rancher who tried to help save Osceola's hospital, its passing now seems sort of inevitable.
"Everything has evolved to the big gets bigger and the littlest disappears," Love said, "and that's really what's happened with these hospitals."
Figures on rural hospital closures were compiled by the AP from data supplied by the Health Resources and Services Administration of the U.S. Department of Health and Human Services and by the Rural Health Research Program at the Cecil G. Sheps Center for Health Services Research at the University of North Carolina. Figures on vulnerable rural hospitals provided by iVantage Health Analytics are based on publicly available data about the financial stability, patient marketplace and cost and quality indicators for hospitals. The hospitals in the bottom tier, which are categorized as vulnerable, have similar characteristics as hospitals that have closed.
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