Hospital closures continue, especially in rural areas, with various organizations and studies either decrying the impact on the community or suggesting it is minimal.  We wondered about the causes and wider implications for these closures and found some recent research to get to the answers.

hospital closures continue

As hospital closures continue, we take a look at causes and implications for patients and local communities.

What’s the scope of these hospital closures?  An article at NPR.org sums it up like this:  “Since 2010, at least 79 rural hospitals have closed across the country, and nearly 700 more are at risk of closing. These hospitals serve a largely older, poorer and sicker population than most hospitals, making them particularly vulnerable to changes made to Medicaid funding.”   The article, written in June of this year, also predicted that the Republican Bill being debated at the time would cut Medicaid and this could worsen the crisis for rural hospitals.

How do hospital closures affect patients? According to another article in NPR, “researchers at the Harvard School of Public Health examined 195 hospital closures between 2003 and 2011, looking at health experiences in the year before and the year after the hospital went out of business. Their paper, published in the journal Health Affairs, found that changes in death rates of people on Medicare — both those who had been in the hospital and among the broader populace — were no different than those for people in similar places where no hospital had closed.”

This second NPR piece does admit that patients are inconvenienced. But at smalltown rural hospitals the story is different, as CNN reports.  The article tells the story of a small hospital in Richland, Georgia closed due to low Medicaid payments while patients were still in beds and surgeries were scheduled. “Ultimately, the hospital closed that Friday, leaving the rural town without a hospital for miles. Raju, who had been the hospital’s chief of staff, is now the only doctor left in the town a two-hour drive south of Atlanta.”

Then there are discontinued medical devices and drug coverage changes. According to the LATimes, “Johnson & Johnson announced that it’s closing its Animas subsidiary and getting out of the insulin-pump business, leaving the field primarily to a single large competitor, Medtronic, which will control roughly 85% of the market.” The rest of the article details how this medical device market change throws patients for a loop and also when insurance companies change what drugs they will cover.  Contact your insurer, learn your options, then do your homework, the writers advise. This also applies to instances when your local hospital closes down.

An article at the HRSA — Health Resources & Services Administration — site quotes George Pink of the North Carolina Rural Health Research and Policy Analysis Center observing that, “many of the closures in recent years affected critical hospitals, a designation by the Centers for Medicare and Medicaid Services for facilities that provide essential services in specially isolated communities. And most shut down amid financial woes tied to upkeep costs for things like leaking roofs, antiquated power supplies, and aging clinical equipment.”
Hospital Closure Risk States

Recent research using data measures suggests that some hospitals may be closed with minimal disruption.  ScienceDirect.com published a math and data-based study on what it calls “optimally” closing hospitals.  It looked at four rural states in the southeastern region and found that “efficiency, coverage, and equality measures for geographical access do not suffer significantly if only a few hospitals are closed in each state, provided these closures are done optimally to minimize impact.”

But the numbers crunchers for that analysis did not seem to consider the wider ramifications of hospital closures in small towns.  In a 2016 letter from the NRHANational Rural Health Association — the point is made that “s rural hospital is often a top employer in rural communities, and can mean as much as 20 percent of the local rural economy. According to iVantage, if 673 additional hospitals were forced to shut their doors, 99,000 direct healthcare jobs and another 137,000 community jobs will be lost. Over 10 years, rural communities will lose $277 billion in GDP. The annual report examines multiple economic metrics for rural hospitals across the nation.”

As to the future for hospital closures, it’s filled with uncertainty with likely closures continuing. The Kaiser Family Foundation (KFF) recently took a look at three hospitals for case studies on each and asked the following four things:

  1. What factors contributed to the hospital closure?
  2. How has the closure affected access to care?
  3. What were the broader community effects of the closure?
  4. Did the state Medicaid expansion decision make a difference in the closure of the hospital or on residents’ ability to access care after the closure?

These seem to be the critical questions for this research.  After first observing that “There are nearly 5,000 short-term, acute care hospitals in the United States. Half of these hospitals are in urban areas and half are in rural areas. About 4 in 10 rural hospitals are located in the South,” the study then goes into detail in the key findings from their work:

  • Privately insured patients often went elsewhere for care, hurting the local hospital’s revenue base and contributing to the perceived low quality of the local hospital.
  • Rural hospitals built in neighboring communities under Hill-Burton (The Hospital Survey and Construction Act, a U.S. federal law passed in 1946, during the 79th United States Congress) now compete for limited patients, federal dollars, and healthcare resources.
  • Corporate business decisions, rather than assessments of local needs or planning, drove the hospital closures.
  • Changes in Medicare and Medicaid payment over the past few years have had an adverse effect on rural hospitals.
  • Rural hospitals have not adapted to new models of payment and service delivery that emphasize preventive and primary care provided in outpatient settings.
  • Many physicians and other providers left the community immediately following the rural hospital closure.
  • Hospital closures result in job losses and have other ripple effects in the surrounding community.
  • Hospital closures can make it more challenging for rural communities to attract employers.
  • Medicaid expansion increases access to care in rural communities, however, Medicaid expansion alone cannot overcome the financial challenges facing rural hospitals.
  • Rural communities could benefit from new health care delivery models that can provide access to care.

Read the comprehensive list and more details and reasoning behind the findings at the KFF site.  We will continue to report on the fate of community hospitals, and hospital closures in general.