Rural health crisis: Hospitals struggle to stay open, shift focus to outpatient care

The rural health financial crisis has forced many hospitals to cut their workforces, others to drop services like routine baby deliveries, and all to look at other delivery options and financial models. But more hospital closures are likely, industry experts say, unless the federal and state governments make policy changes.

Approximately 30 hospitals in Kentucky and Kansas are at risk of closing, FierceHealthFinance previously reported, and roughly 50 facilities, mainly in the Southeast, have closed, according to Albuquerque Business First.  "It's a phenomenon that's going on everywhere because of a variety of reasons--mostly financial,"Jerry Harrison, executive director of New Mexico Health Resources, told the publication.

New Mexico hospitals are at a crisis due to the end of the state's sole community provider program and reduced reimbursements from Medicare and Medicaid. But facilities in states that have not expanded Medicaid eligibility under the Affordable Care Act have had it particularly hard. To survive, many look to alternative financial and licensing models. At least five New Mexico hospitals have stopped routine baby deliveries because of the financial crisis.

This week rural hospital leaders pleaded for regulatory relief at a briefing on Capitol Hill, AHA News reports. They urged Congress to pass the Critical Access Hospital Relief Act, which would remove the 96-hour physician certification requirement as a condition of payment for critical access hospitals, and the Protecting Access to Rural Therapy Services Act, to ensure patients who live in rural communities have access to a full range of outpatient therapeutic services in hospitals in their own communities.

"Everybody is asking for something more, whether it's electronic medical records or the 96-hour rule or direct supervision," Christina Campos, CEO of Guadalupe Hospital in Santa Rosa, New Mexico, said during the hearing. "We feel like we are dying a death of a million paper cuts."

Rural hospitals not only provide needed care to their communities, they are also a major driver of the economy. In addition to hiring workers, the facilities attract employers who rely on hospitals to maintain a healthy and productive workforce, according to an opinion piece in the Washington Post by Patrick Hope (D-Arlington), a member of the Virginia House of Delegates.

"Our rural hospitals need serious, immediate financial help. They face a situation that is only growing worse," wrote Hope, who urged lawmakers to approve expansion of the Medicaid program and look for any means possible to offer financial support to rural hospitals in Virginia.

To survive, Kansas hospitals are testing a new delivery models in rural areas,  the High Plains Journal reports. They aim to find a financially-sustainable model other than critical access hospital status to provide patients with access to essential health services within a reasonable distance and encourage collaboration between local and regional providers.

But without policy changes and financial relief, rural hospitals in Ohio will either close or reposition themselves as outpatient only facilities, Matt Caine, managing director at investment banking and financial advisory firm Solic Capital Advisors LLC, told Columbus Business First.

Two rural hospital operators believe the shift to outpatient care is the key to survival, according to Healthcare Dive. Faith Community Hospital in Jacksboro, Texas, and LifePoint Health in Brentwood, Tennessee, now focus on outpatient care and treatment, expanding services to include physical therapy, rehab physician practices, post-acute care services and outpatient centers. 

"Rural hospitals typically have 70 percent or more of their volume or revenues dependent on outpatient services, but there is a transformation there," iVantage Senior Vice President Michael Topchik told the publication. "The inpatient business that has traditionally defined hospitals has been on the decline for the last five to 10 years. So the future of rural healthcare probably will look different."

To learn more:
- here's the Albuquerque Business First article
- read the AHA News report
- check out the Washington Post opinion piece
- read the High Plains Journal piece
- here's the Columbus Business First article
- check out the Healthcare Dive story

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