It's no secret that rural hospitals are struggling in today's reimbursement environment, but when one such hospital closes, it can result in increased mortality rates in the surrounding area, according to the National Bureau of Economic Research.
In all, about 430 rural hospitals are at risk of closing, the NBER found -- and that's on top of 113 that have already closed since 2010. Remote areas in California have been hit especially hard, and that's where most of the research was focused; the state lost 92 rural hospitals from 1995 to 2011.
Urban hospitals have closed as well, but the data shows there were no immediate impacts to the health of the surrounding populations. Because access to health services can be an issue in rural locales, rural hospital closings had a much more profound impact, with mortality rates rising to 5.9%.
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WHAT'S THE IMPACT
Access to healthcare can be considered a social determinant of health -- defined as the socioeconomic factors that can affect a person's health. SDOH can range from access to care and transportation services to income and education level.
Rural hospital closures exacerbate already-existing disparities in health outcomes in remote areas, NBER found. Ambulance services, which are already limited in rural communities, have to transport patients a longer distance to get to a hospital when a local community hospital closes. That means patients suffering from a health emergency need to wait longer for their care.
The financial burdens affecting many rural hospitals don't seem to be getting any better, and certain trends are working against them. Rural populations are in decline, and hospitals in those areas are struggling to recruit physicians -- a trend only made worse by a physician shortage that's affecting nearly all hospitals, regardless of size or location, across the U.S.
Add to that the fact that many rural residents often lack health insurance. Taken together, these factors paint a picture of older, sicker populations that are more reliant on Medicare and Medicaid, which reimburse for less than private insurance. As a result, revenue and margins are thin.
There's also another factor at play: Medicaid expansion, or the lack thereof. The Affordable Care Act allowed states to expand the Medicaid program, but several chose not to, and hospital closings increased in states that did not expand Medicaid, while expansion states saw closure rates decrease.
THE LARGER TREND
In February, Navigant found that one in five rural hospitals in the U.S. are at a high risk of closing unless their financial situations improve. Adding to the urgency is that 64 percent of these hospitals are considered "highly essential to the health and economic well-being of their communities."
Navigant said 21 percent are at high risk of closing based on their total operating margin, days cash on hand, and debt-to-capitalization ratio. That percentage boils down to 430 hospitals across 43 states and 150,000 employees that would lose their jobs if all of these hospitals closed their doors.