Executive Summary: 

•Rural health care in the United States is facing a crisis of hospital closures and service cuts, a lack of primary care physicians, and overall negative health outcomes compared with urban and suburban areas. 

•Rural hospitals are cutting key services such as chemotherapy, OB services, and, in some cases, inpatient care altogether.

•Rural hospitals have insufficient patient volume to meet their expenses. This is the primary cause of hospital shutdowns and service cuts.

Introduction: 

Over the past decade, more than 136 hospitals in rural areas have closed their doors, further inhibiting access to medical care for residents of small towns. Furthermore, upwards of 700 rural hospitals are at risk of shutting down, and 300 face immediate closure. The primary cause of these shutdowns is insufficient patient volume to meet expenses. It is likely that this trend will continue in the foreseeable future. Additionally, rural health care is facing a shortage of physicians. For comparison, there are 8.0 primary care physicians per 10,000 residents in urban areas and 5.1 per 10,000 residents in rural areas. Furthermore, rural communities tend to struggle across various health outcome metrics compared with urban residents. Rural communities have shorter life spans, higher rates of chronic illness, lower rates of physical activity, higher suicide rates, and higher rates of death due to unintentional injury.

Rural Health Disparities: 

The Effects of Losses, Declining Quality of Care: 

In 2023, half of rural hospitals operated at a loss, up from 43 percent in 2022, indicating a deterioration of an already grim situation. Faced with declining margins, 167 rural hospitals have switched to models excluding inpatient care (since 2010), 382 hospitals no longer provide chemotherapy and 267 have stopped providing OB services. These trends have contributed to worsening health care access and introduced new challenges such as an increased need to travel to access care. Additionally, according to a CDC report, infant mortality rose for the first time in 20 years in 2022, increasing by 3 percent. Infant mortality rose by statistically significant amounts among White non-Hispanic and American Indian and Pacific Islander women. Both of these groups are statistically most likely to live in rural communities. Increases among other groups were not statistically significant. 

Looming Rural Hospital Insolvency: 

In addition to the record number of hospital closures faced within the previous decade, a July 2023 report from the Center for Healthcare Quality and Payment Reform found that over 300 rural hospitals are at risk of immediate closure. The extent of this problem varies heavily by state with some states such as Delaware and Utah reporting 0 hospitals at immediate risk of closure to states such as Alabama and New York with 44 and 45 percent of rural hospitals respectively facing imminent danger of closure. The July 2023 report indicates losses on private insurance patients as the primary driver of overall losses for at-risk hospitals. This contrasts with larger rural and urban hospitals, which traditionally make enough profit on private insurance patients to offset losses on uninsured and Medicaid patients. There are several factors driving losses among rural hospitals. The number one is insufficient patient volume. Rural hospitals, like any hospitals, need to treat a certain number of patients to cover their costs and turn a profit. However, rural hospitals simply are not receiving the necessary patient volumes to operate with positive margins. In terms of what drives hospital shutdowns, within a microeconomic model, businesses will shut down immediately when they are unable to cover their fixed costs, and in the long run when unable to meet their variable costs. This means that sustained losses with eventually lead to an exit strategy, or if losses are severe enough (i.e. inability to meet fixed costs), an immediate shutdown will occur.

Lack of Rural Practitioners: 

Rural areas are often classified as medically underserved. This is partly due to the distance rural residents have to travel to reach hospitals but also due to an insufficient number of physicians practicing in rural areas. For instance, only around 10 percent of physicians practice in rural areas. Rural areas, however, make up 21 percent of the U.S. Population. Viewed from another angle, rural communities have 5.1 physicians per 10,000 residents compared with 8.0 per 10,000 in urban areas. Further contributing to this issue is a decline in medical school students from rural areas, with a 28 percent decrease in enrollment from such students between 2002 and 2017. This could pose a problem, as studies have demonstrated that medical students from rural areas are significantly more likely to practice in those areas. The shortage of health care providers in rural areas means longer patient wait times, reduced access to specialized care, and a greater reliance on emergency services for primary care needs. Additionally, rural health care facilities often struggle to attract and retain staff due to lower salaries, professional isolation, and limited resources compared to urban hospitals. This lack of rural practitioners is likely to become more pronounced as more rural hospitals are forced to close due to sustained losses.

Conclusion: 

Rural healthcare in the United States faces severe challenges due to financial instability and inadequate access to care. The financial difficulties facing rural hospitals have persisted and worsened over the past several decades. Additional pressing issues include a lack of rural practitioners, service cuts, and overall health outcome disparities. If current trends continue, it is likely that these problems will only get worse, leading to more hospital shutdowns.