According to a February report from CHARTIS, half of the rural hospitals in the United States are currently operating in the red. That is an increase of seven percent from 2022 and reflects a 15-year trend that isn’t slowing down.
In recent years, community and regional hospitals have been hit with a perfect economic storm, driven by increased equipment and medication costs, declining reimbursement rates, staffing shortages and non-existent profit margins. As a result, 167 rural facilities have shut down their inpatient units or closed altogether since 2010.
COVID-19-era grant funds helped avert the demise of many struggling hospitals. Those resources have since disappeared, and healthcare administrators struggle to keep the lights on.
With nearly 55% of independent rural healthcare facilities operating at a loss and 418 rural hospitals labeled “vulnerable to closure,” many community and regional hospitals have looked to larger healthcare systems for salvation. Now, 60% of the nation’s rural hospitals are affiliated with a larger healthcare system.
It can be difficult to grasp what these statistics mean for grassroots, working-class men and women in rural and urban areas. According to the American Hospital Association, the nation has around 6,120 hospitals. Among these are 5,129 community hospitals. The rest are federal government hospitals or psychiatric hospitals.
Of the community hospitals, 3,319 are urban-based, and 1,810 are rural-based. Sadly, only 35% of the nation’s community hospitals service over 90% of the geographical United States.
While one would think that a 35% margin share was more than enough to care for the nation’s rural residents, who make up a little over 20% of the population, the problem is not the total number of facilities but the total number of hospital inpatient beds.
Of the nation’s 1,810 rural hospitals, 1,511 have fewer than 100 inpatient care beds, and 850 have less than 25. Plus, these facilities are spread further apart each year. In contrast, urban medical centers tend to have much larger bed capacities, and it is not uncommon to see multiple hospitals within less than a mile of each other.
Rural hospitals face these challenges because the country’s rural population is shrinking, ultimately generating less revenue to keep rural hospitals afloat. Due to patient volumes, small hospitals cannot take advantage of the most lucrative medical tests and procedures, nor do they have the population to keep a full complement of surgeons busy.
Large healthcare systems have been willing to adopt these struggling facilities because doing so ensures an influx of patients into their much larger networks. The network as a whole can take advantage of the most lucrative tests and procedures, benefiting both small and large facilities.
At the local level, a hospital losing money appears to be a liability. But at a system level, it is a revenue feeder, ensuring profits for the whole system.
This symbiotic relationship would appear to be a win-win situation for rural hospitals and larger healthcare systems. While that can be true, it is important to note that the more independent hospitals and small healthcare systems are absorbed into corporate healthcare giants, the less overall voices in healthcare are heard.
Currently, 88% of non-federal inpatient hospital beds are controlled by 400 different healthcare systems scattered throughout the nation. Some are just a few hospitals, but others are massive corporations. For example, mega systems like HCA Healthcare out of Tennessee and Common Spirit out of Chicago own around 200 and 150 hospitals, respectively and the 20 largest healthcare systems in the nation collectively own over 1,400 hospitals.
The end result is fewer voices lobbying for change in our healthcare system and a growing temptation to prioritize the corporation’s bottom line over community needs.
Our government officials and corporate leaders must pay attention to this trend as it develops. They need to ensure that rural hospitals can continue to provide desperately needed services in at-risk communities and that healthcare systems do not focus solely on dollars and cents.
Unfortunately, this has not always been the case. From 2011 to 2021, 267 rural facilities closed their labor and delivery departments, representing a loss of over 20% of the nation’s rural labor and delivery units in only a decade. The Midwest has been the hardest hit by these closures, forcing mothers in labor to travel for hours to deliver their babies. In addition, from 2014 to 2022, 382 rural hospitals also closed their oncology departments, forcing critically ill patients to travel long distances for chemotherapy.
Ultimately, hospital closures and service shutting down leave people at risk with no coverage. Whether it is older adults who cannot physically travel to the big city or those without the economic means to do so, the results are the same: leaving at-risk people out in the cold.
It is time we rethink how our national healthcare system functions to ensure coverage and fairness for all.
Senior Staff Chaplain and Clinical Ethicist at the Baptist Health Medical Center in Little Rock, Arkansas.
