Challenges faced by rural hospitals

That is the topic of a commentary by Carroll et al. (2022) in Health Services Research. The first issue they discuss is access to care.

A core challenge in rural communities is declining access to hospital care. Eight percent of rural hospitals have closed over the last decade, and closure rates have increased in recent years.8 Even hospitals that remain open are downsizing and closing individual service lines. Only 40% of rural counties had obstetric services in 2018, for example, down from 55% in 2004 and 75% in the 1980…obstetric unit closures have disproportionately affected rural communities with a higher proportion of Black residents, those in more remote areas, and in states with less generous state Medicaid programs.

Providing access is not so easy. Rural areas, by definition, have low patient density nearby and lower patient volumes leads to lower revenue and higher cost per patient as capital costs are spread over fewer patients. A study by Hegland et al. (2022) finds that:

…rural hospital markets have more bed capacity per capita and lower occupancy rates than urban areas but less access to other hospital resources such as capital funding and staffing

Rural hospitals aiming to increase revenues may aim to increase bed occupancy, but the only way to do this in rural areas typically involves increasing patient transportation time to the hospital. These longer transportation times, however, may lead to worse outcomes, particularly for when treatment is needed for time-sensitive conditions.

One key point to make is that not all rural hospital closures are bad. While transportation times may increase,

…if hospitals that close tend to provide low-quality care, then closure may improve health outcomes by reallocating patients to higher quality facilities.

Another impact of rural hospital closures are that they may impact the whole local economy as hospitals are often major employers in rural areas. However, supporting employment is not a reason to keep open a hospital that is not providing high-quality care.

Rural hospitals also face challenges from a shifting market. Two trends in particular that represent challenges include:

…consolidation (a supply-side phenomenon wherein hospitals merge or change ownership) and bypass (a demand-side phenomenon whereby rural residents do not seek care at local rural hospitals, “bypassing” them in favor of traveling to urban hospitals).
Consolidation of rural hospitals into systems has increased over time. About 11% of rural hospitals merged between 2005 and 2016…

[Regarding bypass,] a third of Medicare inpatient stays were not at beneficiaries’ closest hospital in 2018, even when services were available at those closest hospitals. A key question is how much bypass has contributed to overall decreases in rural hospital volume. Friedman and Holmes…argue that increases in bypass over time explain more of the overall volume decrease than declines in population or shifts toward outpatient care

The article concludes with a few key policy questions:

  • What types of hospital services should be maintained locally and what types of services should be provided regionally?
  • Should rural hospitals be subsidies and if so how much financial support is warranted?
  • What health equity strategies should be employed for rural hospitals?
  • Should rural hospitals participate more (or less) in alternative payment models linking care to quality?

Overall, the commentary provides a nice overview of the issues facing rural hospitals. Read the whole article here.

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