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Posted on: March 19, 2015 by Huntersure
The state of rural healthcare has made headlines across the nation lately as small hospitals and medical care facilities have been closing at what industry members are calling an alarming rate. According to the National Rural Health Association, which represents about 2,000 small hospitals across the country and other rural care providers, 48 rural hospitals have already closed their doors since 2010 and at least 283 more are at risk. Some experts are comparing the current state of rural healthcare to the industry crisis which followed the overhaul of the Medicare payment system 30 years ago which sparked large scale rural facility closures.
There are a number of factors which have contributed to the struggle of these small healthcare facilities, including legislative and financial complications. Industry experts and practitioners cite declining federal reimbursements for hospitals under the Affordable Care Act (ACA) as the primary reasons for the current struggle. In an attempt to encourage state governments to expand their Medicaid programs, the ACA reduced federal payments to hospitals for uninsured patients while simultaneously reducing Medicare payments. However, most states have failed to bolster their Medicaid programs. This, combined with a constantly changing Medicare budget, has significantly impacted many operations’ bottom line.
Furthermore, rural healthcare facilities also suffer from a number of other disadvantages which make it virtually impossible to achieve economic stability in the changing healthcare landscape. For example, rural healthcare providers often serve disproportionate amounts of elderly and uninsured patients, which increases their dependence on Medicare, Medicaid and other government subsidy plans, making it much more difficult to turn a profit. Attracting talent is also a major challenge for rural healthcare facilities causing wage and employment expenses to climb. Outfitting rural healthcare facilities with the necessary yet often under utilized equipment and technology is also a large expense with a low return for most small facilities. Additionally, rural healthcare operations are most commonly utilized for emergency care and medical services which offer some of the lowest yielding returns in the healthcare industry because these services are necessary and not elective.
While new telemedicine technology and strategies are making it easier to connect rural consumers with the healthcare services they need, physical care facilities are still the backbone of the rural healthcare sector. Experts fear that unless the problems of rural hospitals is addressed by state and federal officials, American could experience the widespread closure of many more rural and small community healthcare facilities over the course of the next few years.
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