Healthcare costs are high, and not only for patients — many rural hospitals are also facing financial strains.
Nearly three in 10 rural hospitals in Virginia are at risk of closing, according to a report published earlier this year by the Center for Healthcare Quality and Payment Reform (CHQPR), a national policy group.
“I think it’s one of the risks that we face right now, is that a lot of hospitals are facing much higher costs,” said Harold Miller, president of CHQPR.
“Costs have gone up because of all the problems of inflation and supply chain problems,” Miller said. “Margins have been going down across the boards. And so many systems are looking to see where they can cut their costs.”
During the first couple years of the pandemic, many rural hospitals were able to stay afloat because of financial aid from the federal government. Now that much of that funding is expected to wind down, hospitals are once again facing losses.
The CHQPR study says as many as 600 rural hospitals across the country are at risk of closing in the next few years, including eight in Virginia.
Miller added that these are just estimates and they don’t release the names of these hospitals due to a possible margin of error. Their report is based on financial data from 2021.
Rural hospitals are more at risk because they are in less populated communities and so aren’t often seeing the volume of patients seeking care.
“Small hospitals need to be paid to support standby capacity for things like the emergency department that need to be there regardless of how many people are using them, in addition to being paid adequately when they do deliver services," Miller said.
Many smaller rural hospitals avoided closing in the past when they were taken over by a larger healthcare system. Larger systems often have more power in negotiating higher reimbursement rates from insurance companies, Miller said.
“And in many cases that worked in the short run,” Miller said. “But there were also communities that experienced problems that later on, the big system that took over that small hospital decided to reduce the services that were offered at the hospital. And then the larger hospital may end up closing the smaller hospital sometime in the future.
If rural hospitals close, communities could become “healthcare deserts,” meaning patients have to travel longer distances for medical care.
Already some of the more expensive services, like maternity care and cancer treatment, are unavailable at many existing rural hospitals.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
