10 things to know about spike in rural hospital closures - Entrepreneur Generations

A U.S. Government Accountability Office report released on Sept. 28 delves into the recent spike in rural hospital closures. Between 2013 and 2017, 64 rural hospitals closed, and another eight closed and reopened. That's more than twice as many closures as the previous five-year period. The 64 hospitals accounts for 3 percent of all rural hospitals in 2013. In contrast, 49 urban hospitals closed in the same time period, which is 2 percent of all urban hospitals in 2013.

Most of the closures stemmed from financial problems, and declining levels of inpatient care contributed to that, the GAO noted. "These declines stemmed from increased competition from federally qualified health systems and other larger health systems, as well as a declining rural population overall. The report notes 2010-16 was the first period of rural population decline in American history," Emily Rappleye reports for Becker's Hospital Review.

It's not the first time rural hospital closures have increased: between 1985 and 1988, 140 rural hospitals closed, about 5 percent of rural hospitals existing in 1985. "These closures are credited to the then-new financial pressures of the Medicare Inpatient Prospective Payment System created in 1983," Rappleye reports.

Medicare and Medicaid are important factors in the current hospital closure trend, too: the average rural hospital depended on Medicare reimbursements for almost half of gross patient revenue in 2016, and the hospitals that closed were even more likely to rely on Medicare than other rural hospitals. Twenty-five percent of the hospitals that closed were designated Medicare Dependent in 2013, compared to nine percent of all rural hospitals.

Because of that dependence, reductions in Medicare reimbursements and bad debt payments disproportionately hurt rural hospitals' bottom lines. Rural hospitals rely more on Medicaid payments too, so rural hospitals in states that expanded Medicaid were far less likely to close than their counterparts in states without expanded Medicaid as of April 2018.

Most of the hospital closures — 77 percent — happened in the South. Texas, which did not expand Medicaid, accounted for 22 percent of the closures, which is more than the 11 percent of closures in the entire Midwest combined, Rappleye reports.

The hospitals that closed were more likely to be for-profit than the average rural hospital. Thirty-six percent of the hospitals that closed were for-profit, though only 11 percent of rural hospitals were for-profit in 2013, the GAO reports.

The report also notes that, while 47 percent of the rural hospitals that closed ceased all services, the rest converted to another type of health care facility, such as an urgent treatment center, primary care, or emergency services, Rappleye reports.

from The Rural Blog https://ift.tt/2zLXW7K 10 things to know about spike in rural hospital closures - Entrepreneur Generations

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