Greater than 700 hospitals within the rural U.S. are liable to closing attributable to monetary instability — that’s greater than 30% of the nation’s rural hospitals. And for greater than half of those 700 hospitals, the chance of closure is instant, in keeping with a brand new report from the Heart for Healthcare High quality and Cost Reform (CHQPR).

Almost each state has rural hospitals liable to closing completely — the one 5 that aren’t are Delaware, Maryland, New Jersey, Rhode Island and Utah. In additional than half, 1 / 4 or extra of rural hospitals are liable to closing, and in 9 states, a majority of rural hospitals are in danger.

The intense monetary issues of rural hospitals are largely the results of insufficient reimbursement by medical insurance, the report argued. It identified that it’s typically dearer to offer well being care in rural areas attributable to smaller affected person volumes and better prices of hiring employees.

Whereas some folks might assume that personal insurers pay greater than Medicare and Medicaid, the alternative is true for rural hospitals, CHQPR CEO Harold Miller informed MedCity Information final yr. He mentioned that in lots of circumstances, Medicare is probably the most profitable payer for a rural hospital.

“Personal medical insurance really pays them a lot lower than their prices — a lot lower than they pay their bigger hospitals. One of many largest drivers of losses for rural hospitals is the funds they obtain from personal medical insurance,” Miller mentioned.

Many rural hospitals merely shouldn’t have sufficient income from different sources to offset these losses, the report discovered. Some rural hospitals have been capable of offset a few of their losses up to now via issues like grants and native tax revenues, however there’s uncertainty in regards to the sustainability of such funding sources and whether or not they are going to be ample to fulfill rising prices.

This yr, spending has continued to rise throughout all hospitals, significantly for labor and drugs. From June 2023 to June 2024, complete supplier spending rose almost 5%.

Healthcare suppliers seem like more and more dissatisfied with the truth that reimbursements by insurers are usually not retaining tempo with quickly rising prices.

Simply final week, suppliers have been fast to react with outrage after CMS introduced its inpatient charge replace, rejecting the two.9 % charge improve. And HCA Healthcare, the nation’s largest for-profit well being system, is presently embroiled in a charge dispute with UnitedHealthcare, the nation’s largest personal well being insurer. If the events can’t attain a decision quickly, HCA suppliers may discover themselves out of community for UnitedHealthcare members. STANDS reported.

The CHQPR report additionally highlighted that rural hospitals are inclined to have low monetary reserves. This implies they don’t have sufficient web belongings — that are buildings and tools, minus debt — to offset losses on affected person companies for quite a lot of years.

To stop closures that can inevitably deprive rural People of entry to care, CHQPR argued that personal insurers ought to improve their funds to rural hospitals. Elevating funds to a degree that may preserve threatened hospitals working would value about $5 billion yearly — and this cost improve would signify simply 0.10% of complete nationwide well being care spending, the report discovered.

The report additionally known as for well being insurers to offer rural hospitals with standby capability funds. Individuals in rural communities depend on native hospitals to be there for them when they’re injured or have a sudden well being drawback, however rural hospitals are usually not paid to take care of that availability, the report famous.

The report additionally famous that the closure of rural hospitals poses a critical menace to the nation’s meals provide and power manufacturing, as farms, ranches, mines, drilling websites, wind farms and photo voltaic amenities are primarily situated in rural areas. With out entry to enough well being care, these industries will battle to draw and retain the mandatory workforce, the report mentioned.

Picture: marekuliasz, Getty Photos