The Threats Are Real: 4 Challenges Facing Rural Hospitals

They may be small, but rural hospitals serve a big role. They provide care to almost half of the U.S. population, and often serve as the cornerstones of their communities. But the challenges facing rural hospitals today are dramatic: volumes are flat or declining, the populations they serve are getting older (and sicker), physicians are burning out, and margins are thinning — thanks to lower reimbursement rates. Meanwhile, disruptive forces like telemedicine and remote monitoring apps are forcing them to wrestle with a new way of doing business.

The threats facing rural hospitals may be serious, but they’re not insurmountable, says Michael Lieb, regional vice president and director of practice management for HealthTechS3. Join Lieb on Sept. 13 at noon CST for his webinar, “Trends Facing Rural Healthcare Boards.” In the meantime, here’s a peek at some of the biggest issues he’ll be covering.

1 . Access
Can the people served by rural hospitals get the care they need, when they need it and at an affordable cost? There are lots of contributing factors to consider. The first is the growing list of hospital closures, which disproportionately affect rural communities. According to this JAMA Forum article, since 2010, nearly 90 rural hospitals have closed—and hundreds more are at risk of closure. One study found that about one-third of hospitals that closed since 2013 were more than 20 miles from the next closest hospital. In an emergency, this can increase the risk of bad outcomes.

Lieb points out that the vast majority of rural hospital closures since 2010 are in states that did not expand Medicaid, which brings up another barrier to access—coverage. “Medicaid expansion has provided a lifeline for many rural and critical access hospitals across the country,” he says.

2. Affordability
It’s not just the cost of care that’s rising. There’s also the cost of complying with an increasingly burdensome set of federal regulations. According to the American Hospital Association, an average-sized community hospital spends $7.6 million per year (or $1,200 per admission) to support compliance with 629 non-clinical regulations from four federal agencies. That does not include regulation and oversight from many other sources, including state and local entities.

3. Workforce Shortage
As any rural hospital administrator knows, it’s not easy recruiting physicians and nurses to small community settings. And things are getting harder, as provider shortages are increasing, and physicians are either aging—more than one-third of all currently active physicians will be 65 or older within the next decade—or burning out. Meanwhile, the outlook on the nursing side is just as grim. The country will need to produce more than 1 million new RNs by 2022 to be fully staffed. Lieb says rural hospitals will need to get creative in how their recruit and retain talent, thinking not just about compensation and things like loan forgiveness or scholarships, but also lifestyle benefits such as call requirements, quality of life and cost of housing.

4. Community Needs
Rural hospitals have long served as the cornerstones of their communities, offering services such as fitness centers, health fairs and smoking cessation classes. Increasingly, and in response to the community health needs assessment requirement in the Affordable Care Act, rural hospitals are taking a broader approach focused on the well-being of the community. For example, community education around opioid use can help prevent addiction. Providing transportation to and from healthcare providers can ensure people get routine care and avoid a high-cost emergent issue.

Catering to the needs of the community is an added layer of expense, Lieb says, but that shouldn’t stop rural hospitals from putting the ideas into action. “It has the goal of both improving health status and ultimately reducing costs,” he says.

Tune in to next week’s webinar for an in-depth look at these and other major issues facing rural hospitals and ideas for how to address them.