Beyond Poverty: Healthcare Deserts, Part 3

Healthcare deserts are being created in communities nationwide due to hospital consolidations, closures and the elimination of emergency rooms, maternity care services and other departments. This has now reached crisis level in suburban and rural communities.

According to a 2023 study by the Pittsburgh-based Center for Healthcare Quality and Payment Reform, in more than half of the states, 25% or more of rural hospitals are at risk of closing, and in 12 states, 40% or more are at risk. Further, the study found that over 600 rural hospitals nationwide are at immediate or high risk of closure due to financial losses on patient services, unstable financial reserves and debt. The loss of hospitals and other healthcare services often results in a total loss of access to comprehensive medical care in these communities.  In Pennsylvania, 10 rural counties don’t have a hospital at all, forcing residents to travel miles for medical care and putting them at-risk in emergencies.

“In many of the smallest rural communities, the only thing there is the hospital,” Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, stated in a previous news report. “The hospital is the only source. Not only is it the only emergency department and the only source of inpatient care, it’s the only source of laboratory services, the only place to get an X-ray or radiology. It may even be the only place where there is primary care.”

Research by the U.S. Government Accountability Office, found that over 60 million people live in rural communities, are generally older and suffer from worse health conditions than urban residents.  Rural residents often lack insurance coverage, which results in decreased access to healthcare and increased risk of poor health outcomes. The GAO found that many rural residents are choosing telehealth services as an alternative to address limited healthcare available in rural areas. However, it also found that at least 17% of people living in rural areas lacked broadband internet access, compared to 1% of people in urban areas.

FEDERAL REMEDIES

According to the National Rural Health Association, 35% of rural hospitals operate at a financial loss, mostly due to cuts in reimbursement. The problem began in 1983 when the federal government moved to a payment system that rewards volume versus actual costs. Federal legislation then created a series of payment options specifically targeted at keeping rural hospitals open. These payment options include Medicare-Dependent Hospital, Low-Volume Hospital and Critical Access Hospital, the smallest of hospitals, which receive enhanced cost-based Medicare reimbursement to remain solvent.

However, in 2011 Medicare payments were cut by 2%.  In 2012, there was a 30% to 35% reduction in reimbursement for Medicare patients who can’t cover out-of-pocket expenses, and an across-the-board 2% budget sequestration in 2013. These reductions hurt rural hospitals and hospitals serving primarily low-income communities tremendously and contributed to the demise of many.

Federal lawmakers are focusing on correcting the causes of the creation of healthcare deserts. Thankfully, there is a bipartisan effort to curb the disturbing trend of hospital closures in rural communities by making sure hospitals are fairly reimbursed for their services by the federal government.  In 2023, legislation introduced by Pennsylvania Sen. Bob Casey, Jr., the Rural Hospital Support Act, would index payment adjustments for sole community hospitals and Medicare-dependent hospitals to FY2016 operating costs, if it results in higher payments for such hospitals. The bill also makes payment adjustments for Medicare-dependent hospitals and low-volume hospitals permanent (the adjustments currently expire at the end of FY2024). The bill is now under review by the Senate Finance Committee.

U.S. Sens. Mark R. Warner (D-VA) and Marsha Blackburn (R-TN), reintroduced the Save Rural Hospitals Act. A companion bill was also introduced in the U.S House by Congresspersons Terri Sewell (D-AL) and Drew Ferguson (R-GA). First introduced in 2020 as a response to the record number rural hospitals that closed during the pandemic, the legislation would amend the flawed Medicare Area Wage Index formula that disproportionately harmed rural and low-income hospitals. Many hospitals in rural areas lack the financial resources available to those in more populated areas to offer competitive salaries. Due to the salary differences, rural hospitals receive lower reimbursements from the federal government, which contributes to their lack of resources and perpetuates staffing crises.

Blackburn also introduced The Rural Health Innovation Act that would establish grant programs providing up to $500,000 a year for five years, to certain federally-qualified health clinics in rural areas to pay for needed equipment and staffing. Up to $750,000 would be available to establish federally-qualified health clinics in rural areas. She also introduced The Rural America Health Corps Act that would create a student loan repayment program for medical providers who work in rural areas with shortages of primary, dental or mental health care workers. According to the bill, the government would pay a portion of the principal and interest on a provider’s qualifying loans, up to $200,000.

BENEFITS AND LIMITATIONS

While it is too early to assess the impact of these acts, these government measures/solutions can potentially increase access and availability of services as well as talent retention. The problem is multi-faceted and legislators recognize that lack of access to healthcare affects everyone, but policies alone will not solve this problem. The effectiveness of these policies depends on the collaboration and coordination of all community members and partners to optimize the use of resources and address this crisis head on.

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