Before the COVID-19 pandemic began, hospital closures were increasing in rural communities across the nation: 116 rural hospitals closed between 2010 and 2019. Over the past two years, federal relief has helped stabilize facilities, and the pace of closures slowed. However, this assistance was temporary, and rural hospitals continue to struggle financially and to recruit and retain nurses and other health care employees.
Against this backdrop, the Bipartisan Policy Center (BPC) conducted a series of interviews over the last year with rural hospital leaders from eight states—Iowa, Minnesota, Montana, Nebraska, Nevada, North Dakota, South Dakota, and Wyoming—as well as with health policy experts from federal and state government, national organizations, provider organizations, and academia. The goal was to gain on-the-ground insights into today’s rural health care landscape, where the population is older, sicker, and less likely to be insured or seek preventive services than in urban areas.
Today in rural America, roughly 1 out of every 3 individuals are enrolled in the Medicare program and nearly 1 in 4 individuals under age 65 rely on Medicaid as their primary source of health care coverage. Although all payers should be part of the solution in ensuring access to quality rural health care, this report largely focuses on strengthening rural health care delivery in Medicare and Medicaid given the outsized role these public programs play in rural communities.
BPC assessed financial vulnerability across multiple domains and found that out of 2,176 rural hospitals, 441 face three or more concurrent financial risk factors, putting them at risk of service reduction or closure. Financial risk factors included: negative total operating margin, negative operating margin on patient services alone, negative current net assets, and negative total net assets.
(2) Hospital closures have multiple, significant impacts, (emphasis added):
Rural hospital closures can significantly reduce access to health care services in the community, particularly in less densely populated places. According to a 2020 report by the U.S. Government Accountability Office (GAO), one-way travel time to health care services increased approximately 20 miles from 2012 to 2018 in communities with rural hospital closures. Travel times for less common services increased even more. For example, in some rural communities that GAO studied, the median travel distance for substance use treatment services rose from 5.5 miles in 2012 to 44.6 miles in 2018 following a closure. Closure of facilities also affects the availability of health care workers.
The report proposes three immediate interventions:
BPC recommends several short-term policies aimed at immediately stabilizing and strengthening access to CAHs and other small rural hospitals and rural health clinic services. The proposals are designed to serve as a bridge as health care systems exit the pandemic and move toward longer-term reforms. Policy recommendations include:
- Providing rural hospitals full relief from across-the-board Medicare spending reductions, known as sequestration, until two years after the federal PHE ends.
- Taking rural facilities out of the ongoing “extender” and “needing to be renewed” budget cycle, including by permanently authorizing the Medicare Dependent Hospital (MDH) program and making rural low-volume payment adjustments permanent.
- Updating or rebasing Sole Community Hospital (SCH) and MDH payment structures to ensure reimbursement is in line with current costs.
BPC also recommends advancing and refining new rural care delivery models, including, most notably, the REH model that Congress passed in December 2020 and which becomes available to rural hospitals in 2023. The U.S. Department of Health and Human Services (HHS) is considering how to implement this model. Although the REH model is consistent in many ways with BPC’s previous recommendations, additional steps are needed to ensure its success.
BPC received extensive feedback from rural stakeholders, health system leaders, and rural policy experts about the areas of the REH model that hold promise and areas that require refinement or additional consideration. Not every community or hospital will benefit from the REH model, but improvements to this delivery option would likely result in a higher participation rate among communities and facilities. A primary area of concern for stakeholders is how to structure the new, additional facility payment. Although payments would be made available to REH participants to cover services and supports beyond the typical Medicare reimbursement structure, stakeholders worry that such payments may be set too low or be too restrictive to prove useful to REHs.
- Recommendations in this report would extend the capacity of the existing health care workforce and improve the retention of providers in rural areas. Discussed later, BPC outlines several recommendations, including leveraging federal tax credits to encourage health care workers to remain in rural communities and improvements in the rules that allow practitioners trained outside of the United States to practice in underserved areas. Additionally, BPC considers opportunities to reduce administrative burdens, improve reimbursement for rural providers, and restructure health professionals’ scope of practice regulations.
- Stakeholders consistently reported that temporary telehealth flexibilities helped sustain access to clinical services during the public health crisis and will continue to be a valuable tool if certain flexibilities remain in place. This report includes a series of recommendations to build on this success to ensure that rural and frontier communities can continue to benefit from virtual care advancements.
The report is extensive, comprehensive, and replete with practical proposals for providing a plan for rescuing at-risk rural health facilities and building a sustainable future.
I would recommend reading it.
Chief Operating Officer