Rural Hospitals Face Daunting But Manageable Challenges, Says Rural Health Expert

rural_health_morgan__mediumRural hospitals nationwide are facing a host of financial challenges, but states can still take action to keep them open, the head of a rural health group told the Governor's Rural Health Working Group on Wednesday in Topeka.

Alan Morgan, CEO of the National Rural Health Association, said people in urban areas have a few explanations for why rural hospitals are struggling: irreversible population decline in rural areas, low-quality care and bad management practices.

In fact, he said, rural population across the nation appears to be stabilizing, rural hospitals do as well as or better than urban hospitals on quality measures, and insurance companies have struggled with the economics of serving rural populations.

However, he said, that doesn't mean the problems of rural hospitals are an urban exaggeration. If hospitals continue to close at the current rate, about one in four rural hospitals will close in the next 10 years, Morgan said. A study released earlier this year by NRHA and iVantage found that 673 U.S. hospitals, including 29 in Kansas, were at risk of closing in the next decade.

Gov. Sam Brownback announced formation of the working group in January to address the challenges of health care delivery in rural Kansas.

Part of the challenge is that rural residents tend to have more health problems than people who live in urban areas, Morgan said, and rural communities have been hit especially hard by increases in opioid abuse and other behavioral health issues. That translates into a disproportionate number of patients who can't afford preventative care and use the emergency room for treatment, he said.

"We have a low-income population with great health needs," he said.

Since 2010, hospitals also have been hit with a series of financial blows, including federal budget cuts associated with sequestration, reduce Medicare reimbursements under the Affordable Care Act and a shift toward outpatient care, Morgan said.

Until that time, most rural hospitals operated with from roughly a 2 percent profit to a 2 percent loss, he said. Now, the average is closer to running in the red by 6 percent.

Rural hospitals also disproportionately suffer from difficulty recruiting health care providers, and many are burdened by debts or old facilities that aren't well-suited to providing the outpatient care that people use more often now, Morgan said.

"These hospitals are still structured like they were in the 1940s," he said.

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