Rural Hospitals Are Closing at an Alarming Pace

There is an interesting article in the New York Times titled A Sense of Alarm as Rural Hospitals Keep Closing that looks at a growing trend happening in the hospital space.  Rural hospitals are closing their doors and this is affecting Americans all over the country.  Some of the eye-opening facts in the article:

  1. Since 2010, nearly 90 rural hospitals have had to close.  This 2016 study suggests that there are 100’s more rural hospitals that are in danger of closing as well.
  2. The Medicare Payment Advisory Board reported to Congress that of the 67 rural hospitals to close since 2013, about 1/3 of those were more than 20 miles to the next closest hospital. This has a major affect on OB/Gyn services as well as emergency room services.  A recent study in JAMA found there are higher-risk preterm births in counties without obstetric units.
  3. Some doctors did respond to earlier articles that the main reason for this is high malpractice premiums. Since Cunningham Group tracks malpractice insurance rates by state, we have not seen this happening across the country.  For the most part, malpractice premiums have continued to drop for close to a decade now.  There are of course physicians that have higher risk profiles, and thus an insurance company may raise their rates.  We think the biggest reason for the closing of rural hospitals has been the consolidation around healthcare since Obamacare was implemented.  As you can see in Figure 1, mergers spiked about the PPACA became law.  This is not surprising since the PPACA really stressed consolidation because of the need to coordinate care.

There are a ton of other interesting facts and figures in this great NYTimes article and highly recommend everyone read it.  If you are a doctor or patient in a rural part of the country…..what have your experiences and what do you think can be done to fix this growing problem?


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