Sep 19, 2024 Chris King, MHA

Rural Hospital Closures & Provider Shortages: The Perfect Storm

Rural Hospital Closures & Provider Shortages: The Perfect Storm

Encountering locked facility doors, a lack of appointments, and overburdened doctors and nurses is a familiar experience for people in need of healthcare in the rural U.S. Across these landscapes, rural hospital closures and the scarcity of healthcare providers have created what experts term "healthcare deserts." 

When you think about a person wandering the desert, figuratively speaking, you think about someone who’s sweating, broken down, lost, and delirious. Then, a spark of hope: They see a mirage on the horizon and head there, but an oasis never materializes. It vanishes. 

Similarly, in these rural areas, there’s a need for an oasis—a place where patients can access the care they need, when they need it. But those same people are routinely left stranded. 

What’s the larger impact on populations, and why is this happening? Let’s explore the current state of rural healthcare, the reasons hospitals in these areas are failing, what’s causing provider shortages, and how community leaders and healthcare systems can work together to solve this perfect storm of issues. 

Understanding the Crisis: Lack of Preventive Care in Rural Communities 

According to The Center for Healthcare Quality and Payment Reform (CHQPR), there are more than 1,000 small rural hospitals in the United States that deliver traditional hospital services, including emergency care, lab testing, and inpatient care, as well as primary care, long-term care, and preventive care. The communities they serve, however, are usually at least a half-hour drive from the nearest alternative hospital, making care delivery challenging. 

This is important to note, because lack of access to preventive care services, exacerbated by the shutdowns of some of these facilities, increases the risk of health problems going undiagnosed or inadequately treated. When obstacles like distance, cost of travel, and inclement weather get in the way, patients are less likely to seek out the care they need, and delays in diagnosis or treatment can result in more serious health problems and more expensive treatment. 

Preventive care is critical to mitigating the burden of chronic diseases in particular. Screenings can catch conditions like heart disease and diabetes early on and prevent them from becoming more costly down the road. 

When healthcare providers can be proactive, everyone benefits, from the patient to the payer and the provider. When preventive care is accessible, we can do a much better job of keeping diseases in check and treating conditions before they fester. 

Amplifying Disparities: Vulnerable Populations in Rural Areas 

Vulnerable populations, including black, indigenous, and other people of color (BIPOC), Latino/Hispanic people, the elderly, and low-income individuals, bear the brunt of healthcare deserts. 

According to The Rural Health Information Hub, one of the major factors contributing to disproportionate health problems in rural minority communities is inadequate access to care. Racial and ethnic minority populations in rural areas often experience health disparities in the following categories: health status, rates of chronic disease, life expectancy, and more. And in areas where race and ethnicity overlap with rural geography, patients experience dual disparities and face some of the worst outcomes in the country. 

The U.S. Food and Drug Administration also highlights that rural residents tend to be older and are at higher risk for poor health outcomes than urban residents, and more older adults, people with disabilities, veterans, and the uninsured live in rural areas. These populations are generally at a higher risk of disease and death. In addition, rural residents are more likely to have multiple health conditions.  

And the kicker? Limited access to care is exacerbating these disparities. Think of people without healthcare access—it’s like they’re floating adrift on the open ocean. They're castaways. But then, one day, they come across a healthcare island. They find that little island, and it becomes a true oasis for them, because now, they don't have to swim. They're not tired anymore. They're not exhausted. They're able to find and leverage that resource. It’s like a life raft to them. 

These vulnerable populations need a lifeline; otherwise, the disparities in healthcare caused by rural hospital closures and provider shortages will only compound. 

Identifying Root Causes and Ongoing Pain Points 

The American Hospital Association reports that there have been over 136 rural hospital closures since 2010, and nearly 70% of primary-care health professional shortages are in rural or partially rural areas. In addition, only 10% of physicians in the U.S. practice in rural areas, despite 14% of the population being in these geographies. 

With each hospital closure and provider shortage, the gap in access to care widens. But what is behind these closures and shortages? 

Financial Drain Caused by Insurance and Payer Challenges 

According to CHQPR, rural hospital closures usually occur after the hospitals experience losses for several years that drain their financial reserves. Some of the root causes of these losses can be traced back to populations unable to pay and trouble with billing payers.  

Many rural hospitals struggle financially due to the combination of lower patient volumes and higher rates of uninsured and underinsured patients. They often encounter difficulties with reimbursement from government payers due to regulatory hurdles, and small rural hospitals tend to lose substantial amounts on private-pay patients.  

Due to this financial instability, rural hospitals are often forced to run on very thin profit margins, which makes it difficult to cover operating expenses and invest in modern infrastructure, let alone attract workers.  

Little Incentive for Providers to Accept and Keep Positions

Because rural areas have lower population densities and are located far from urban centers where training institutions and job opportunities are more abundant, they also often can’t retain physicians, nurses, and specialists due to a perceived lack of career prospects. This only serves to worsen access issues, leading to longer wait times for appointments and services.

Smaller Populations and Outsized Healthcare Costs

Population declines and escalating healthcare costs have further magnified the challenges faced by rural communities. 

For example, primary care in rural communities is often associated with significantly higher costs due to smaller patient populations. Combine this with increasing cost-sharing requirements in private insurance plans, and you get higher levels of bad debt and compounding losses over time that snowball to closure. 

The Importance of Equitable Access to Care for Patient Engagement 

If lack of access isn’t bad enough, it also results in patients who don’t actively engage in their own healthcare. Instead of seeking out care when they need it, they may take a “wait and see” approach and only go to the doctor when their condition has considerably worsened—sometimes, dangerously so. Many people in rural areas don't think about access to care except in extreme situations.  

But when patients are able to see their doctors more often and actively engage in their own care, it’s been shown to improve health outcomes and satisfaction with the care experience, reduce costs, and even benefit the provider experience. 

Innovative Solutions: Bridging the Gap in Rural Healthcare

Solving the many healthcare challenges faced by rural populations is not easy. But even so, there’s hope for a brighter future. 

Organizations like Hamilton Health Box are pioneering innovative solutions to bridge care gaps. We’ve developed several hybrid models of care that blend in-person visits with telehealth services, offering a glimpse of a more accessible future. 

For example, our microclinics are fabricated facilities purpose-built for primary care delivery at job sites and rural locations. By partnering with providers, employers, and payers, Hamilton Health Box can help set up these microclinics beyond city limits and meet underserved populations where they are. Better yet, this model of care has a small footprint, empowering organizations to affordably extend access while providing high-quality care to rural towns as small as 2,000 people. 

Hamilton Health Box also offers full onsite clinics that can serve as essential care outposts, mobile clinics that can deliver services at remote locations, and mobile clinicians that visit homes or other on-site locations. 

Given how rampant rural hospital closures and provider shortages are today, there’s an urgent need for these innovations. 

A Moral Imperative for Action at the Highest Levels

It’s a moral imperative to reduce tomorrow's high-cost care by providing low-cost care today. 

Advanced solutions cannot bear the burden of these rural hospital closures alone. They must be combined with policy action that lowers the regulatory barriers for rural hospitals, new legislation that ensures patients in rural communities can access essential care services, and partnerships between other organizations, governments, and health systems to adequately pay for the services patients need at rural hospitals. 

But this moral imperative to act goes beyond the realm of policy and economics. The consequences of inaction will extend far beyond the present, shaping the health landscape for generations to come. We need to come together to prioritize the health of everyone in our society—including those in rural communities. 

Mobilizing for Change: Advocacy Is Also Crucial

To confront the realities of rural healthcare deserts, advocacy and action are paramount. The time for complacency has passed; we must rally behind initiatives that prioritize access to care, and that’s where policy comes in. 

From a policy perspective, when you look at a population for a given geographical area—regardless of its status as rural or urban—policy will determine how those without commercial insurance have access to care. Without it, people are just going to continue to use ERs — the most expensive setting for care. Yet, if there's effective policy in place, it provides other avenues to provide care in lower-cost settings. 

Effective policy only comes about through strong advocacy. We need to put a voice behind rural healthcare needs and advocate for practical solutions that will make a difference in meeting those needs rapidly and at scale. When leaders come together to outline these issues and form an action plan with clear next steps, change can happen—it just needs momentum. 

Working Together to Weather the Storm

These challenges aren’t going to solve themselves. It’s critical that community leaders and healthcare representatives combine forces to raise awareness around rural hospital closures and provider shortages to help combat healthcare deserts. 

Community leaders need to do everything in their power to lower the operating cost of clinics to bring care in. They can also engage the state and other local officials to provide additional resources, be it access to facilities to train healthcare staff or access to the funding they desperately need. These leaders have a major role to play. 

In the vast expanse of rural America, the struggle for accessible healthcare continues. Yet, within this challenge lies an opportunity—to unite in purpose, to innovate, and to ensure no community is left behind. By championing the cause of rural healthcare access, we can pave the way for a healthier, more equitable future. 

Curious about how we can weather this perfect storm together? Book a meeting with me today and discover how Hamilton Health Box can be an oasis of healthcare in the desert. 

Chris King, MHA
Published by Chris King, MHA

Chris King is Chief Development Officer at Hamilton Health Box, where he focuses on expanding the company’s business into both existing and new markets. His bachelor’s degree is from Texas Tech University and his graduate degree was completed with honors at the University of Southern California. Prior to Hamilton Health Box, Chris was the Sr. VP of Sales and Business Development at AvaSure, LLC, the leading provider of in-patient fall prevention solutions. Chris’ role at Hamilton Health Box serves to deliver upon his post-graduate commitment to improving population health.​

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