Staffing Crisis, Payment Cuts Put 453 Hospitals At Risk Of Closure

By Ayla Ellison

More than 135 rural hospitals have closed since 2010 and another 453 are vulnerable to closure, according to a recent report.

Pandemic relief aid brought stability to rural hospitals last year, which is reflected in the number of hospital closures. Only two rural hospitals closed in 2021. Nineteen closed in 2020 and 18 closed in 2019.

Rural hospitals across the U.S. received more than $12 billion through the Coronavirus Aid, Relief and Economic Security Act and the Accelerated and Advance Payment Program. Without additional relief aid, rural hospitals will face significant financial strain. Excluding pandemic-related relief funds, 45 percent of rural hospitals are operating in the red, according to the report released Feb. 8.

Several factors are contributing to the negative pressure on rural hospitals, including recruitment and retention of clinicians, health disparities and the unintended consequences of government policies, according to the report.

In December, Congress extended the sequester — a 2 percent reduction in Medicare reimbursement — through March 31, 2022. A 1 percent reduction will apply from April 1 to June 30, and the full 2 percent reduction is slated to return on July 1. Once the full reduction kicks in, rural hospital revenues will plummet by more than $228.5 million and result in the potential loss of 4,600 jobs this year, according to The Chartis Group analysis.

Rural hospitals are also committing more financial resources to plugging gaps in staffing.

The nursing shortage is forcing many rural hospitals to increasingly rely on traveling nurses, but not all staffing shortages can be addressed quickly. Many rural hospitals are being forced to suspend services due to a staffing shortage, according to the report.

The Chartis Group said the research and analysis in the report should provide legislators and rural healthcare advocates with a starting point to devise and develop public policy aimed at stabilizing the rural health safety net.