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Will Rural Community Hospitals Survive?

Nelson, Roxanne

AJN The American Journal of Nursing: September 2017 - Volume 117 - Issue 9 - p 18–19
doi: 10.1097/01.NAJ.0000524538.11040.7f
AJN Reports

Low patient volume and reimbursement issues drive closures.

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Hospital care in the United States is in a state of flux, as costs continue to spiral upward while reimbursement shrinks. One casualty of this instability is the small rural community hospital, as demonstrated by a growing number of recent closures.

Though hospital closures affect urban communities, too, the loss is not felt as acutely as when a hospital shutters its doors in a rural area, says Brock Slabach, MPH, FACHE, senior vice president for member services at the National Rural Health Association. He notes that such closures uniquely affect rural communities in two key ways: “One is the access to care, as a hospital closure can mean people may now have to travel a greater distance for medical care. The other is the effect on the economy, as a hospital is 20% of a rural economy.”

The 2015 American Hospital Association Annual Survey identified 5,564 registered hospitals in the United States. Of those, 4,862 were community hospitals, 1,829 located in rural areas.

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EFFECTS ON THE COMMUNITY

In addition to providing essential health services, rural community hospitals either directly employ or support many of the health care personnel who reside in rural areas. These hospitals are also considered vital to the community because they bring in revenue from other sources such as third-party payers, and help attract new businesses, industries, and retirees. A hospital's closure has a major impact on the community's entire health care infrastructure. “When a hospital closes, the employees—physicians, nurses, and others—will leave,” says Slabach. “Other types of clinics that are not owned by the hospital but depend on the hospital may find it more difficult to operate.”

According to the Health Resources and Services Administration, the employment of one primary care physician in a rural community can generate 23 jobs, both directly and indirectly—a “pretty stunning number,” says Slabach. “We look at physician recruitment as economic development, but recruiting can be difficult. Also, recruiting other businesses is difficult when a hospital closes because no one wants to come to an area that doesn't have health care.”

As medical care is increasingly being channeled into the outpatient setting with the growth of clinics and home health care, hospitals have been filling fewer beds. Many facilities are operating with fewer inpatients, have closed down completely, or have transformed to outpatient facilities. Reimbursement issues and mergers and acquisitions are also factors contributing to hospital closures. Although there have been closures in urban areas, “those have largely been systems making themselves more efficient,” says Slabach, explaining that the dynamics between urban and rural areas are different. If a hospital closes in an urban area, other services are usually still available nearby, he says.

At least 21 U.S. hospitals closed in 2016, although a few still offered outpatient services such as imaging, emergency care, or primary care. Low patient volume was a common reason cited for the closures. At the 73-bed Saddleback Memorial Medical Center in San Clemente, California, for example, on many days there were fewer than 10 inpatients. McNairy Regional Hospital in Selmer, Tennessee, closed after its admissions decreased by nearly 70% between 2010 and 2015; visits to its ED also dropped.

Other facilities have cited financial losses from poorly compensated or uncompensated care, such as Southern Palmetto Hospital, a 53-bed facility in Barnwell, South Carolina, that closed in January 2016. North Georgia Medical Center in Ellijay shut its doors after struggling with a significant decrease in patient volume along with a large increase in charity and indigent care.

Another factor strongly affecting rural community hospitals is a provision of the Budget Control Act of 2011 that reduced Medicare payments to providers by 2%. “A rural hospital may derive 70% of its income from Medicaid and Medicare, which makes it harder hit by that 2%, whereas for an urban facility that portion of income is 35%,” Slabach says.

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SURVIVAL TACTICS

But not all community hospitals are going under, and in fact, creativity and efficiency are helping some to do exceptionally well. “The community hospitals that are thriving have become increasingly creative with providing services,” says Ann Fronczek, PhD, RN, assistant professor at Binghamton University's Decker School of Nursing in Binghamton, New York, and co–project director of the Southern Tier Telemedicine and Mobile Health Research Development and Training Center. “Telehealth has been greatly expanded and well received, and many [hospitals] are becoming savvy at applying for grant funds through cross-collaborations with other health care partners,” she says. “Some of the more rural hospitals also maintain a strong social presence in their communities.”

According to Slabach, successful community hospitals master essential operations, have their revenue cycles in top shape, are innovative and forward thinking, and use management techniques that make operations more effective. For example, such hospitals might increase their primary care workforce, offer telehealth and telemedicine services, deliver care using models such as the medical home, or participate in accountable care organizations.

When community hospitals close, nursing positions are lost. But, despite greater employment opportunities in urban areas, “nurses are very employable” in rural areas, says Pamela Stewart Fahs, PhD, RN, associate dean, professor, and Decker Chair in Rural Nursing at the Decker School of Nursing at Binghamton University. “If a rural hospital closes and nurses and their families choose to remain in that rural area, they can find jobs at other sites, depending on how far they want to travel,” she explains. “There are more jobs available than nurses who can fill them. We also have a large number of nurses expected to retire in the near future, and now that the economic environment has improved, they may retire sooner.”

Fronczek notes that nurses in rural areas can't limit themselves to one specialty area, but instead must take on a “jack of all trades” role that may involve providing primary, emergency, and public health services all in one. Some nurses are also incorporating telehealth into their practice and increasing their collaboration with telehealth providers, which supports care in rural areas.

But nurses can also play a role in helping to keep hospital closures from happening in the first place. Fahs explains that nurses can be effective in their communities by teaming up with other professionals. “There is strength in numbers, and this can bring awareness to the situation,” she said. “It is also imperative to be part of a professional organization to [boost] the influence nurses can have on health care policies.”

Thus, nurses can influence the strength of community hospitals and the rural and vulnerable populations they serve not only through clinical practice, but through advocacy as well. “They can work with legislatures and tell personal stories of why rural hospitals are important and of their positive impact on a community. Nurses can also step up to the plate and run for office,” says Fahs.—Roxanne Nelson

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