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Two Arizona Hospitals shut their doors, highlighting struggles of rural and community hospitals

Rural hospitals have been closing their doors at a record clip in recent years.

Jeff Lagasse, Associate Editor

Two community hospitals in Arizona are shuttering their doors after struggling financially for years, falling victim to the challenges currently being faced by rural facilities across the country.

ABC15 reported that Gilbert Hospital closed on Saturday, while Florence Hospital at Anthem was set to close today. By last Friday evening, ambulances had stopped bringing new patients to both hospitals' emergency departments.

Rural hospitals have been closing their doors at a record clip in recent years, losing revenue as patients have opted for larger medical centers, retail clinics and telemedicine to fulfill their healthcare needs. In February, Greg Hagood, president at financial advisory firm SOLIC Capital, told Healthcare Finance News that one fundamental cause of this trend is that healthcare delivery is evolving away from inpatient care in favor of more outpatient care.

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With more outpatient care, he said, "You tend not to stay in the hospital as much, so the utility of having a 24/7 bedded hospital is really declining. What rural communities need more of are procedures, but it's difficult to support that kind of volume in rural locations."

He predicted that many rural hospitals may look to transition into community clinics or specialized care facilities, which provides a more financially sustainable framework and retains certain types of services within a given market.

No such luck in Arizona. The hospitals in Gilbert and Florence had been unable to secure new owners or investors, leading creditors to force Chapter 11 bankruptcy, according to ABC15. Employees were informed of the closures late last week; plans are still being made for patients who had made appointments past their respective closure dates.

Last fall, researchers from Texas Tech University Health Sciences-Odessa made a case for rural hospitals partnering with academic surgery departments as a means to keep surgeons and procedures in-house, reduce patients transfers, increase patient satisfaction and boost revenue.

The research team developed five hospital partnerships between rurals and academic surgery departments, such that each one benefited from the other's resources, which cut the cost of recruiting and staffing surgeons -- and the increased presence of surgeons meant fewer patients had to be transferred to receive services. The partnerships yielded an average net revenue increase of $4.7 million.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com