Rural hospitals across the U.S. are struggling financially and the pandemic made it worse

Posted at 2:55 PM, May 08, 2020

As U.S. hospitals cope with more COVID-19 patients, they’re also dealing with a hit to their income.

“Our volume has dropped by at least 50 percent,” said Chief Medical Officer Dr. Carmelo Hernandez at San Luis Valley Health in southern Colorado.

The hospital Dr. Hernandez works at is in a rural community surrounded by mountains.

“Our typical clinic volume was on the order of 7,500, 7,600 visits per month, and that’s dropped by at least half at our current numbers,” he said.

While hospitals prepared for a potential influx of COVID-19 patients and adjusted to CDC social distancing guidelines, a lot of other work was put on hold.

“We’ve restricted our elective surgeries. We’ve restricted our elective procedures,” Dr. Hernandez said.

That meant less money was coming in.

“The impact has been profound,” he explained. “Economically, this crisis has been dramatic.

“If we don’t have this hospital here, then economically the area is going to suffer,” Dr. Hernandez said.

The issues he and his co-workers face isn’t a unique one. Rural hospitals across the U.S. are seeing the flow of revenue from medical payments dry up.

“The challenges that rural hospitals faced before COVID-19 have just been emphasized and elevated since that time,” Alan Morgan, CEO of the National Rural Health Association, said. The nonprofit advocates for rural health issues.

“So far this year, we’ve already seen 10 rural hospitals close, and we’re just in spring right now. Back in February, before the pandemic began, 47 percent of the nations rural hospitals were operating at a loss,” Morgan explained.

A recent study done by Guidehouse showed 1 in 4 rural hospitals was at high risk of closing due to financial problems, even before coronavirus.

“We’ve seen closures in Kansas, Tennessee, Missouri, West Virginia, North Carolina,” Morgan said. “Before this crisis began, the fundamental problem is that rural hospitals have a concentrated patient base that is uninsured or under insured.”

On top of that, many hospitals had to stop outpatient and elective procedures, which Morgan said accounts for about 80 percent of their income. Fewer patients and elective surgeries have already started to have an impact.

“Our current financing system for the nation’s rural hospitals is based on volume,” Morgan said. “To be able to keep the lights on and pay the clinicians, you need a certain level of volume coming in the door.”

As restrictions ease, Dr. Hernandez said the hospital is making changes to keep safety a top priority while bringing back services that were put on hold.

“I think we need to start making some small steps and some small gains in opening up our economy and our communities again,” he said.

“Much of the innovation that we’re going to see come out of this crisis is going to come from rural communities,” Morgan said. “They innovate on the fly.”