Twenty-one percent of U.S. rural hospitals are at high risk of closing unless their finances improve, according to an analysis from management consultancy firm Navigant.
The study also found 64 percent, or 277, of high financial risk rural hospitals are considered essential to their communities.
The analysis — which examined the financial viability (operating margin, days cash on hand and debt-to-capitalization ratio) and community essentiality of more than 2,000 of the nation’s rural hospitals — suggests 21 percent or 430 rural hospitals in 43 states are at high risk of closing. These hospitals represent 21,547 staffed beds, 707,000 annual discharges, 150,000 employees and $21.2 billion total patient revenue, according to Navigant.
Of the 43 states, 34 have five or more rural hospitals at risk.
Navigant cited payer mix degradation; declining inpatient care driving excess capacity; and inability to leverage innovation as factors putting the hospitals at risk. Medicare payment reductions, the age of many rural facilities and a lack of capital to invest in updated, innovative technology were specifically cited.
“While the potential for a rural hospital crisis has been known for years, this predictive data sheds light on just how dire the situation could become,” the study authors concluded. “Now, by being able to accurately assess the economic health of all rural hospitals in America, there is no choice but to pay attention. Local, state and federal political leaders, as well as hospital administrators, must act to protect the well-being of rural hospitals nationwide and the communities they serve.”
Read more about the analysis here.