A recent article in The New York Times, “A Sense of Alarm as Rural Hospitals Keep Closing” highlights the implications of rural hospital closures, including diminished access to care in many parts of the country.
We see this trend playing out in New York. When we talk about the fragility of healthcare providers, we need to look no further than our financially struggling rural hospitals. Since 2008, 23 hospitals have closed in New York; seven of them were rural hospitals.
There are many reasons for hospital closures, not just financial challenges. Hospital system consolidation and market dynamics can play a major role. In many cases, the closure can be part of a larger strategic plan that maintains the provision of healthcare services in that location while not technically remaining a “hospital.”
A hospital “closure” doesn’t necessarily mean the entire facility is shut down and services have disappeared. Healthcare services are often continued as an extension clinic or freestanding emergency room under the operating certificate of another hospital.
However, in some cases hospital closures can have severe consequences for communities, including loss of needed hospital services, loss of specialists (who tend to cluster around hospitals), longer distances for patients to travel and severe economic consequences as jobs and local hospital spending evaporate.
New York’s rural hospitals face intense fiscal challenges. Most barely break even, and some have negative operating margins. In 2017, the average operating margin for New York’s rural hospitals was .68%. New York’s hospitals are nonprofit, but they need a modest margin each year (4% is considered sufficient) to be able to reinvest in healthcare services and modernize their facilities.
Rural and small community hospitals face unique challenges regarding workforce recruitment and retention. With fewer resources and lower patient volumes, small hospitals are hard-pressed to operate as efficiently as their urban counterparts. Often, Medicare reimbursement does not cover the cost of care rural and small community hospitals provide to Medicare patients. Recognizing the important role of rural and small community hospitals, Medicare has special designations and therefore payments for certain hospitals. HANYS advocates to protect and expand these critical designations.
Telemedicine is a bright spot for rural healthcare. It enables hospitals to leverage the resources of their neighboring facilities or tertiary centers hundreds of miles away and access the best specialty care for their patients without the need for patients to travel or experience long wait times. HANYS is advocating for increasing the array of telemedicine services that can be reimbursed by Medicare.
Our rural hospitals are often the only source of care in their communities. They are economic powerhouses as well, contributing to local economies. The overall trend of disappearing rural hospitals is worrisome. Many struggling rural hospitals, against tremendous odds, are fighting to survive and continue their mission of providing care to their communities—and they need our support.