Rural Healthcare

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Rural Healthcare

Recently, there have been many stories in the news about the problems facing rural healthcare, with over 150 rural hospital closures since 2010, and another 450 on the verge of closing. A recent study by the Chartis Center for Rural Health, using detailed historical performance statistics for a minimum of three years, found that 453 of 1844 rural hospitals are vulnerable to closure.

Books have even been written on the subject by well-known experts in the field. However, often not taken into account are those rural hospitals that have merged with larger chains. Most of our WOA Members are not directly affected by these developments.

Challenges facing the rural healthcare system include:

  • Medicare reimbursements, now averaging 60-80% of private payer reimbursements.
  • Medicaid reimbursements averaging 40% of the private-payer level.
  • A higher proportion of Medicare and Medicaid patients in rural areas.
  • In addition to these lower rates of reimbursement in the current environment, the enacted regulations resulting from Obamacare dictate that the reimbursement rate for Medicare patients must continue to decline, until it reaches the 40% Medicaid level. Clear challenges result for all hospital providers.
  • Due to smaller volumes (critical mass), rural hospitals have financial challenges, justifying the ever-increasing capital equipment needed for superior care.
  • Financial distress has caused some rural hospitals to close their ER, OB and primary care departments, etc., which can have a major negative influence for the community as a whole.

In addition to these challenges, various rural communities have had private providers enter the local market who accept only private-payer patients, shunning those with Medicare and Medicaid. This syphons off the better-paying patients, leading to further deteriorating financial health. Ultimately, rural communities are faced with inferior healthcare, long commutes for care, and significant second-order community impacts (imagine trying to recruit young teachers to the local schools without an OB department nearby).

Among the many issues facing the healthcare community, it is doubtful that the situation for rural hospitals will receive much, if any, attention from Congress. However, roughly 20% of the nation’s population receive their care in the rural setting. Stay tuned.

William J. Best
[email protected]


DISCLAIMER: Statements of fact and opinion are the responsibility of the authors alone and do not imply an opinion or endorsement on the part of the officers or the members of WOA unless such opinion or endorsement is specifically stated. Materials may be reproduced only if Touches and the Western Orthopaedic Association are credited.

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