March 6, 2020
Medicaid’s Impact on Rural Hospital Closings in the U.S.
Rural hospitals closures are on the rise across the United States. In February 2020, the Chartis Center for Rural Health (CCRH) released a new study revealing 120 rural hospitals nationwide closed from 2010 through January 1, 2020.
Forbes even explored CCRH’s findings in a recent article.
“The closure crisis has affected rural hospitals located in non-Medicaid expansion states much more so than in states that have expanded Medicaid,” the detailed CCRH report notes.
In fact, the CCRH report calls this situation the “the rural hospital closure crisis.” They list key reasons why facilities that provide life-saving healthcare in rural and remote parts of the country are shutting down.
Key rural hospital closure factors, according to CCRH:
- Hospitals located in states that have not adopted Medicaid expansion have lower median operating margin. These states also have a higher percentage of rural hospitals with negative operating margins.
- Being in a Medicaid expansion state decreases the likelihood of closure by 62 percent on average.
- Government Control Status was shown to decrease the likelihood of closure 70 percent on average.
- System Affiliation was shown to decrease the likelihood of closure by nearly 50 percent on average.
A Becker’s Hospital Review article highlighted primary reasons for rural hospital closures such as:
- Revenue pressure– Rural areas have fewer commercial payers than more urban markets. This means these hospitals have a higher volume of state-funded healthcare with lower reimbursement rates.
- A complex patient population– As the U.S. population ages and struggles with chronic conditions, these issues are more extreme in rural areas.
- Attracting and retaining providers– Remote locations have a harder time recruiting full-time physicians, especially in specialties such as orthopedics or neurology. […] It leads to lack of access to care for patients, burned out physicians and loss of revenue for organizations.
“One way some rural hospitals are keeping patients healthier and relieving revenue pressure is to better connect with patients on a regular basis, inviting them to participate in routine, preventive care.”
Becker’s Hospital Review, Why Rural Hospitals are Closing, Aug. 28th, 2019
Combating Limited Resources
The National Rural Health Association summarizes the need for health information technology (HIT) on their website as:
“Ironically, the barriers to health information technology (health IT) adoption in rural areas are the same features that would make health IT of special benefit to rural settings. Only after adoption barriers are overcome can health IT revolutionize the challenges of isolation, distance and limited resources that are so dominant in rural areas.”
The NRHA explains HIT includes:
- Disease registries
- Clinical decision support systems (CDSS)
- Computerized provider order entry (CPOE)
- Electronic health records (EHRs)
- Electronic prescribing (eRx)
- Health information exchange
- Personal health records
- Interoperability and telehealth
For more information about a health IT solution designed to save money, simply billing coding, maximize reimbursements and reduce IT overhead among other benefits, visit Provation’s portfolio of medical procedure documentation software, including cloud-based Provation® Apex.