Rural health crisis: 30 hospitals in two states could close

As many as 30 rural hospitals in Kentucky and Kansas are at risk of closing due to financial duress, Becker's Hospital CFO has reported.

A number of factors have hit rural facilities hard, including a tough financial environment and declining populations in their service areas, according to Becker's. 

While many of the facilities have a critical access designation and therefore are entitled to higher payments from the Medicare program, the 2 percent across-the-board sequestration cut brought their payments below actual costs, according to High Plains Public Radio.

"There are some basic things you would expect to have in a hospital, like television sets and telephones, that Medicare does not consider allowable costs," Jodi Schmidt, president of the National Rural Health Association (NRHA) told High Plains Public Radio. "And then there are a number of physician costs outside of the emergency room and other sorts of operational overhead expense that the government doesn't consider allowable."

And for those younger patients who do not have insurance, Schmidt said hospitals may collect as little as 7 cents on the dollar from them for their care.

Rural hospitals have been in a fiscal crisis for several years now, with the NRHA saying that 48 hospitals have shut down since 2010, and another 283 are experiencing financial duress. Facilities in states that have not expanded Medicaid eligibility under the Affordable Care Act have had it particularly hard. Kansas--which has the highest number of critical access facilities in the country--has not expanded its Medicaid program. Georgia, another state that has not expanded Medicaid, has also seen its rural hospitals suffer financially.

And while Kentucky has expanded its Medicaid program, Becker's said 68 percent of its rural hospitals are below the national average in assessed financial strength and 15 are in danger of closing. 

To learn more:
- read the Becker's Hospital CFO article 
- check out the High Plains Public Radio report

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