The concerning state of rural medicine - a big missing piece in healthcare transformation

Neil Raden Profile picture for user Neil Raden December 20, 2022
The US healthcare narrative is about "patient outcomes" and personalized medicine, supported by permissioned data. But the data on the state of rural hospitals tells a very different story. Unless we reckon with this, healthcare transformation is off the table.

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According to an article in Becker’s Hospital Review, a 2020 study from the Center for Healthcare Quality and Payment Reform found that 40% of all rural hospitals were at immediate risk of closing - even before the COVID-19 pandemic added to their woes because of significant financial losses over multiple years or high dependence on local taxes or state grants.

Nearly every state in the US has at least one rural hospital at immediate risk of shutting down. In 21 states, 25% or more of rural hospitals were at immediate risk, according to the report. 

More than 130 rural hospitals have closed over the past decade, and over 600 additional rural hospitals — more than 30% of all rural hospitals in the country — are at risk of closing soon. People could be directly harmed if these hospitals close.

The crisis in rural hospitals in the US - six points of concern

  1. Rural hospitals in the US are in peril.
  2. 600 or more rural hospitals are in danger of closing.
  3. The effect on health and safety of people served by those hospitals are in peril.
  4. When a rural hospital closes, another has to pick up the overflow. If it is predominately patients on Medicare, Medicaid or just uninsured, it increases financial pressure on the other hospital.
  5. Most hospitals, with the exception of the very large hospital groups, are poorly run, lack adequate staff and management technology.
  6. A major cause of rural hospital closures is low reimbursement from private insurance.

Funding and insurance problems

Payments from private health insurance plans fail to cover essential services in rural communities. Large urban hospitals see much higher reimbursements on patients with private insurance that covers offset debts on uninsured patients and patients with Medicaid. Small rural hospitals don’t have that luxury. Many small rural hospitals are paid less for services by private insurance plans than by Medicare or Medicaid, which state insurance commissions should investigate. Hospitals that are losing money year after year can’t maintain the adequate capacity needed to respond to emergencies.

Local hospitals have fund-raising mechanisms from local tax revenues, grants or subsidies from other businesses that help to cover the gaps. Still, as costs continue to escalate, there is no assurance these mechanisms will be adequate. 

Across the US, 892 hospitals — more than 40 percent of all rural hospitals in the country — are at immediate or high risk of closure. According to the report, the 300+ hospitals at increased risk of closure either have lower financial reserves, or increased dependence on non-patient service revenues such as local taxes or state subsidies. 

The shortcomings of EHRs and patient data access

The top priority for most healthcare executives is patient care. This often leads organizations to prioritize direct patient care initiatives rather than indirect projects. As a result, finance teams and back-office departments can become an afterthought. Although many organizations have implemented EHRs to support their providers and other key stakeholders, the financial component is rarely a leading factor in that decision. This is unfortunate, because it leaves critical data trapped in EHR systems. Finance teams don’t have the necessary tools and technologies to do their jobs. 

In general, healthcare leaders need to partner with vendors and suppliers with proven industry experience --instead of your generalist buddy in the local area.

During the pandemic, hospitals received a lifeline in the form of funding from the 2020 CARES Act, with rural providers getting additional support through the American Rescue Plan. The Rural Hospital Support Act introduced in Congress last year proposed additional relief.

Paradoxically, saving rural hospitals will cost less than allowing them to close. Paying rural hospitals adequately would increase national healthcare spending, but only by a minuscule amount — 1/10 of 1%. Spending would likely increase even more if the hospitals are allowed to close because of the more significant health problems rural residents will experience if they lose access to adequate preventive care and prompt treatment.

Hospital woes also affect urban hospitals

For example, two months after Wellstar Atlanta Medical Center announced it would lock its doors for good, the hospital shuttered at midnight on Nov. 1 — its future, and the future of the neighboring hospitals it leaves behind, remain uncertain. 

The closure of the 460 bed hospital has drawn concern from local hospital leaders, community members, government officials and health equity leaders. According to the Atlanta Journal-Constitution, sixty-seven percent of the facility's emergency room patients were African-American. Without it, a significant source of care for underserved populations will dissolve, leading to overcrowding at other nearby safety net hospitals

Since the medical center closed its emergency department on October 14, leaving nearby Grady Memorial Hospital the only level 1 trauma center in Atlanta, local emergency response times have soared. Nearby hospitals absorbed the Wellstar facility's former patients, creating an uptick that led 80 percent of them to hit capacity

My take

This is "good news" for stockholders of larger healthcare entities that are getting rid of "non-profitable"  hospitals. There will be millions with inadequate healthcare, thousands that suffer permanent injury because they cannot receive immediate care for medical emergencies, and some of those will die. Or, on the other hand, when a smaller hospital closes, large healthcare systems capture patients who have nowhere else to go, increasing their revenues. The whole system is perverted.

Pregnant women in rural areas will not receive essential services. Sadly those women will give birth, in too many instances, to infants with preventable problems. Caring for those infants after birth may require intensive care and/or life-long care at tremendous cost to our nation --- not simply financial.

Before a rural hospital closes, a rapid emergency response system should be established, with "way stations" for immediate stabilization and treatment before patients are transferred to hospitals. Pregnant women should receive care from advanced registered nurse practitioners and certified nurse midwives placed in small communities. Home visits should be an essential component of maternity care.

Our country sends exploratory devices to the outer reaches of our solar system and beyond. Amazon can deliver purchased items to mountain villages in Nepal, and telemedicine permits people lucky enough to own computers and pay for internet services to access providers 24/7. Billionaires can take "whoopee rides" into space. But the average American living outside urban areas cannot access essential healthcare services. Healthcare is a human right, not a privilege. This an intolerable situation. When will the US, as a nation, wake up?

Image credit - A medical healthcare doctor wearing a mask, stethoscope and typing on a computer laptop - by @pichetw at

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