May 7, 2024 - Health

America's rural hospitals are on the financial knife edge

Map showing share of rural hospitals in each state with negative operating margins in 2024. Nationally, 50% of rural hospitals have negative operating margins. The states with the highest share of rural hospitals operating at a loss are Kansas (89%), New York (83%) and Wyoming (83%) while Utah had the lowest share, at 16%.
Data: Chartis; Map: Alice Feng/Axios

Half of America's rural hospitals are running in the financial red, per a recent report from health care consultancy Chartis.

Why it matters: Millions of Americans rely on rural hospitals for emergency and other forms of care.

  • Plus, as the report points out, "within many rural communities, the hospital is often among the largest employers and thus a major contributor to the local economy."

Driving the news: While COVID-era government aid helped alleviate some financial pressure on rural hospitals, those support programs have largely ended.

  • The growth of Medicare Advantage enrollment is also taking a toll.
  • "The Medicare alternative's popularity with seniors is cutting into a typically better funding source for rural hospitals — traditional Medicare — as hundreds of rural hospitals face financial calamity," Axios' Arielle Dreher reports.

Stunning stat: The jump from 43% of rural hospitals operating in the red last year to 50% this year is the single largest change in percentage in a 12-month period that Chartis reports seeing.

What they're saying: "When you see all of this negative pressure, what you're really talking about is loss of access in the places where we need it, one could arguably say, most," says Michael Topchik, partner and executive director of the Chartis Center for Rural Health.

  • He points to problems like suicide, opioid overdoses, alcohol-related deaths and more that plague rural America in particular.
  • "I'm focusing on data on the providers, on the hospitals. But in the end, what we're really talking about is the communities served — and these are the most vulnerable communities in America."
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