Preventing the disappearance of America's rural hospitals
August 2, 2020
When it can often take hours to drive to access the best medical care, rural hospitals are essential. Whether in downstate Illinois or in small-town Oklahoma, rural hospitals are the backbone of our communities. They don’t just provide critical health care to communities; they also drive the local economy and are among the largest employers in the area.
The COVID-19 pandemic is pushing many rural hospitals to the brink of extinction and poses a dire threat to the economies of rural America. Even before this public health crisis, rural hospitals were facing financial uncertainty. Leading up to 2020, half of all rural hospitals were operating on negative margins, and one in four was at risk of closure. Nationwide, 120 hospitals have been shuttered in the past decade, and 2019 was the worst year yet for this grim statistic. When a rural hospital closes, jobs disappear, doctors leave, and patients lose access to care. Nearby businesses struggle to stay afloat, and families are often forced to pull up roots.
We cannot allow that to continue.
The COVID-19 pandemic has accelerated and compounded the strains facing our rural hospitals. All hospitals have been forced to acquire additional personal protective equipment (PPE) and scale back and/or postpone elective and outpatient services. Nationwide, 76 percent of revenue for rural hospitals comes from these elective surgeries. And with COVID-19 transmission shifting to rural areas, our hospitals – especially those located near particularly vulnerable populations such as nursing homes or meat processing facilities – are seeing increased cases and inpatient capacity strains. On average, rural hospitals have only a one-month’s supply of cash on hand.
According to the American Hospital Association, hospitals have already lost an estimated $202 billion since the onset of the pandemic, with another projected $120 billion in losses in 2020. But more than figures on an accounting sheet, if a hospital closes as a result of this pandemic, there would be long-term, catastrophic consequences for the community.
In the last two coronavirus relief packages, Congress provided $175 billion to meet the immediate, emergency funding needs of hospitals and providers. These funds have helped patch a fraction of the enormous cash-flow shortfalls that rural hospitals face, but additional action is needed to provide stability to the most vulnerable hospitals for the coming months and years.
Many readers may think things are so bad in Washington, DC, right now that Republicans and Democrats cannot work together on anything. But when it comes to preserving rural hospitals, we can and we must work together.
We have introduced the Rural Hospital Closure Relief Act, which would update Medicare’s “Critical Access Hospital” designation to allow some of the most vulnerable rural hospitals — those facing financial losses in areas with shortages of providers and serving low-income communities — to quality for higher Medicare payments. Specifically, our bill would restore authority to states, which previously sunset in 2006, to provide flexibility around the requirement that a qualifying Critical Access Hospital be 35-miles away from another hospital. This 35-mile threshold does not always capture the full circumstances or needs in rural areas.
Across Illinois and Oklahoma, as well as states like Tennessee, New York, Iowa, and Kentucky, scores of hospitals would qualify for this financial lifeline and secure the stability to continue serving their communities with quality care.
There are many ideas out there to address rural health care delivery challenges, and we support many such proposals. The cost of inaction is being felt across rural America. If a progressive Democrat and a conservative Republican can find common ground, so should the remainder of the US Senate. That’s why we must take up and pass the bipartisan Rural Hospital Closure Relief Act before it’s too late for too many communities.