Troubling Outlook for Rural Hospitals

Dave Mosley, Politico

An estimated 430 rural hospitals – roughly 1 in 5 – are in danger of closing unless their financial outlooks improve, a situation that has broad ramifications not just for access to health care but those communities’ economic livelihoods, Pro’s Rachana Pradhan reports.

That's according to an analysis from the consulting firm Navigant, which found that about two-thirds of states have at least five rural hospitals at high financial risk of closing.

Dozens of rural hospitals have already closed nationwide this decade. About two-thirds of rural hospitals now at high risk of shuttering are considered essential to their localities for several reasons: They serve vulnerable populations, are geographically isolated and employ a sizeable share of residents.

“The communities these hospitals serve are changing,” said David Mosley, a managing director with Navigant’s government health care practice. But, he adds, “Often the hospitals haven’t changed at all.”

What's behind the struggles: Declining inpatient care; more uncompensated and under-compensated care for uninsured and people covered by entitlement programs; and lack of capital to invest in technology upgrades.

How this could play in state-level politics: Supporters of Medicaid expansion have argued that adopting the optional Obamacare coverage program will ease the financial strain on rural hospitals, particularly in southern states.

The Navigant analysis, however, shows the struggles cut across states regardless of their Obamacare politics. The top 10 states with the highest percentage of endangered rural hospitals include a mix of expansion and non-expansion states: Connecticut, Alabama, Mississippi, Georgia, Alaska, Maine, West Virginia, Arkansas, Florida and New Hampshire.

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