The AHCA will cause the closing of many rural hospitals across the country, with major economic and social consequences beyond the obvious medical impact.
Top line findings:
- Rural hospitals, in contrast to their urban counterparts, are financially precarious due to a combination of demographic, technological and economic factors;
- Nearly two-thirds (63%) of inpatient care in rural hospitals, compared to less than half (49%) of inpatient days in urban hospitals, are reimbursed by Medicare or Medicaid, and they receive additional federal patient revenues under the Affordable Care Act.
- The Affordable Care Act has materially reduced rural hospital losses from uncompensated care by improving the percentage of rural residents with health coverage.
- The combination of financial fragility and heavy reliance on federal insurance programs makes rural hospitals acutely financially vulnerable to reductions in the number of patients or scope of services covered by those programs.
- Reflecting the general urban-rural partisan divide, over 95% of rural hospitals are located in Republican congressional districts.
If federal policymakers fail to take into account the vulnerability of rural hospitals as they reform federal health programs, it is likely that numerous rural hospitals will fail within the next few years. Large areas of rural America will be affected. Rural hospital closures can be expected to result in economic and social dislocations that reach far beyond their impact on health care delivery.
Rural hospitals have a vital role to play not only in the physical health but the economic health of their communities. They are often the single largest employer, and have an indirect employment impact through commerce with local businesses. Across the country, rural hospitals directly and indirectly employ around 750,000 people and generate revenues of almost $70 billion per year. In Tennessee alone, the rural hospitals included in the study serve almost 1 million people and have combined annual net patient revenues over $1 billion. They directly employ over 10,400 full-time staff, and on average support another 6,000 non-healthcare jobs. That’s on average 6.5% of total employment in the rural counties where they are located.
Click here for rural hospital report and here for how Medicaid cuts would impact hospitals in Tennessee.