Rate of rural hospital closures is rising, study finds

July 20, 2015

Since 2010, the rate of rural hospital closures in the United States has increased significantly. During this period, there have been three closures in North Carolina alone.

Brystana Kaufman

To achieve a preliminary look at recent closures, researchers from the University of North Carolina at Chapel Hill compared the 2009 financial performance and market characteristics of rural hospitals that closed between 2010 and 2014 with data from rural hospitals that remained open during the same period.

Brystana Kaufman, MSPH, recent graduate of the Department of Health Policy and Management at the UNC-CH Gillings School of Global Public Health, was lead author of a paper about the study findings. Titled “The Rising Rate of Rural Hospital Closures,” the article was published online July 14 by The Journal of Rural Health.

Kaufman, who is also a graduate research assistant at the N.C. Rural Health Research Program, housed in the Cecil G. Sheps Center for Health Services Research, led a team of six UNC-CH co-authors. Other researchers included George Pink, PhD, Humana Distinguished Professor, and Mark Holmes, PhD, associate professor, both with the health policy and management department at the Gillings School.

The study identified recent closures as either critical access hospitals (CAHs) or other rural hospitals (ORHs). The researchers found that in 2009, CAHs that subsequently closed had, in general, lower levels of profitability, liquidity, equity, patient volume and staffing.

“Since 2010, most rural hospitals that closed had weak financial performance, suggesting efforts to improve finances may reduce closure rates,” said Kaufman. “About half of the closed hospitals continue to provide access to some health services as outpatient clinics or other type of facilities. The other half no longer provide health services of any kind, and new models of rural health care may be needed to provide essential services for these communities.”

Researchers do not yet have a clear understanding of the causes or outcomes of the recent closure phenomenon, as many potential drivers are confounded. For example, although closing hospitals are more likely to be located in a state not expanding Medicaid, they are also more likely to be in the South, which historically has lower profitability.

As financial characteristics do appear to be clearly associated with the closures of rural hospitals from 2010 through 2014, it may be possible to identify hospitals at future risk of closing. This study should serve as a formative step toward understanding the causes and impacts of such closures on rural communities.

To see a map of national rural hospital closures from January 2010 to the present, visit tinyurl.com/hospital-closures.