A Quarter of Rural Hospitals at ‘High Risk’ of Closure, COVID-19 Likely to Make it Worse

Dave Mosley, partner at Guidehouse, said in a statement that hospitals often serve a key economic purpose beyond the clinical services offered to rural communities, one which was in jeopardy before the domestic spread of the coronavirus.

“It was already troubling that the economic outlook for rural hospitals deteriorated during the longest period of uninterrupted economic growth our country has ever experienced,” Mosley said. “A major crisis like the COVID-19 pandemic or any significant economic downturn is likely to make the situation even more dire.”

The analysis offered strategic advice for rural provider executives, including a focus on scale through partnerships with regional health systems or academic medical centers, and working with community leaders to “promote and sustain” hospital operations and the outflow of patients to distant care sites.

The Guidehouse analysis stated that though there is not one single solution to remedy the complex financial challenges facing rural providers, federal lawmakers have legislative options to lessen the burden.

Namely, the analysis cited the Rural Emergency Acute Care Hospital (REACH) Act, a bipartisan bill introduced in 2017, that would allow critical access hospitals (CAH) to align the care delivery model to the needs of the community without the “financial disincentive of losing cost-plus reimbursement.” Additionally, the bill would allow CAHs to shed excess inpatient beds and shift focus to outpatient care options.

Guidehouse’s analysis was released two days after the Urban Institute published a blog post that stated that the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, which included a $117 billion stimulus package for hospitals, might not be enough for rural providers.

Diane Arnos and Fredric Blavin, co-authors of the post, stated that while urban hospitals have been hardest hit by the pandemic, rural hospitals face specific challenges related to the virus in their respective communities as well.

“From serving higher-risk populations to struggling with limited funding, rural hospitals face serious challenges that may require additional federal action to address,” Arnos and Blavin wrote. “To improve access to and quality of care for rural communities, state and federal policymakers should consider supplying medical equipment and other assistance as the pandemic spreads to these areas.”