May 13, 2024 - News

Rural hospitals struggle

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

71% of rural hospitals in Arkansas are running in the financial red, according to a recent report from health care consultancy Chartis. The same is true for half of America's rural hospitals.

Why it matters: Millions of Americans, especially those in rural states like Arkansas, rely on local hospitals for emergency and other forms of care.

  • The report also 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 financial pressure on rural hospitals, such support has 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 reported last August.

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 one-year 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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