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FORECASTING: How to predict closure of rural hospitals

From January 2010 to December 2015, 63 rural hospitals closed, and over 1.7 million people are now at greater risk of negative health and economic hardship due to the loss of local acute care services.”

A model to predict financial distress and the risk of closure for rural hospitals is described in this scholarly article out of the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.  The model was validated in that all of the selected financial performance indicators were found to be associated with the likelihood of hospital financial problems.  A surprise was that investor-owned rural hospitals were found to be more likely than expected to be in financial distress; although, this might be linked to their tendency to be located in southern states, which – as a region – are more likely to be struggling financially.

Source: Holmes, G.M., Kaufman, B.G., and Pink, G.H. (2017, Summer). Predicting financial distress and closure in rural hospitals. Journal of Rural Health, 33(3), 239-249.  Click here for access to the publisher’s website: http://onlinelibrary.wiley.com/doi/10.1111/jrh.12187/pdf  Posted by AHA Resource Center (312) 422-2050, rc@aha.org


HOSPITAL CLOSURES: What is nurse executive’s role?

Five nurse executives who were employed at rural hospitals were interviewed about their experiences when their hospitals closed.  The researchers categorized key themes brought out in these interviews, which are discussed in this brief article.  They cover topics related to a flattening of the organizational structure of the hospitals, a strong sense of family among staff, development of crisis conditions concerning supplies and workforce and feelings of betrayal by the hospital owners.  They also mention the challenges of finding qualified board members and top administrators in small communities.  Another difficulty was the disposition of medical records after the closure.

Source: Warden, D.H., and Probst, J.C. (2017, January). The role of the nurse executive in rural hospital closure. JONA. Journal of Nursing Administration, 47(1), 5-7. Click here for publisher’s website: http://journals.lww.com/jonajournal/Abstract/2017/01000/The_Role_of_the_Nurse_Executive_in_Rural_Hospital.3.aspx   Posted by AHA Resource Center (312) 422-2050, rc@aha.org

How do we provide hospital services in rural areas?

How does a society provide hospital care for people located in remote, sparsely-populated areas?  What role does government play in providing financial support to keep the doors open for small rural hospitals?  These are questions of long-standing concern to policy makers.  An approach has been the creation of special reimbursement categories for these hospitals under the Medicare program — such as the critical access hospital (CAH) designation, among others.  In this issue of The Journal of Rural Health, there are 3 articles looking at the financial performance and quality issues related to critical access hospitals.

Critical access hospitals are small facilities (less than 25 beds), located in rural areas, and have a short inpatient length of stay.  Because they are often the only hospital in the area, they receive Medicare reimbursement that is intended to be more supportive than the prospective payment system that is used to determine Medicare reimbursement for most hospitals.  Holmes et al. studied the financial condition of rural hospitals over the period 2004 to 2010 and concluded that if the Medicare CAH program were to be abolished, the percentage of critical access hospitals with negative total margins would jump up from the current 28 percent to 44 percent, which would likely lead to a wave of hospital closures.

Gautam, et al.  analyzed the performance of critical access hospitals in Missouri and found that CAHs were less efficient than other types of rural hospitals.  However, the researchers conclude that there are benefits based on the contribution to the local economy and the critical access hospitals’ role as the only health facility in the area that may outweigh any savings that might be derived from withdrawing their special cost-based reimbursement.

Finally, Casey, et al. took a look at existing quality measures to see which might be appropriate for reporting by critical access hospitals (not currently required to provide data to the Hospital Compare database).

Source:  Holmes, G.M., Pink, G.H., and Friedman, S.A.  The financial performance of rural hospitals and implications for elimination of the critical access hospital program; and, Gautam, S., and others.  Measuring the performance of critical access hospitals in Missouri using data envelopment analysis; and, Casey, M.M., and others.  Rural relevant quality measures for critical access hospitals.  The Journal of Rural Health;29(2):140-171, Spring 2013.  Click here for access to the publisher’s website: http://onlinelibrary.wiley.com/doi/10.1111/jrh.2013.29.issue-2/issuetoc  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Top 100 Critical Access Hospitals – 2013

Another hospital ranking has been released. This one by iVantage Health Analytics lists the top 100 critical access hospitals. The listing is based on the firm’s Hospital Strength Index that looks at quality, outcomes, patient perspective, cost and charges, other financial, competitive strength and intensity, and market size and growth factors. The list, an overview discussion, and a description of the methodology used are available.


HealthStrong top 100 critical access hospitals – 2013. iVantage Health Analytics, Mar. 11, 2013. http://www.ivantagehealth.com/wp-content/uploads/2013/03/Top-100-CAH-List_new.pdf

Benchmark performance for critical access hospitals. iVantage Health Analytics, Mar. 2013. http://www.ivantagehealth.com/wp-content/uploads/2013/03/TOP-100-CAH-Report-of-Findings.pdf

Hospital strength index methodology. iVantage Health Analytics, 2013. http://www.ivantagehealth.com/wp-content/uploads/2013/03/2013_Hospital-Strength-Index-Methodology.pdf

Related resource:

Flex Monitoring Team Site: A Performance Monitoring Resource for Critical Access Hospitals, States, and Communities. Rural Health Research Centers at the Universities of Minnesota, North Carolina-Chapel Hill, and Southern Maine, accessed Mar. 15, 2013. http://www.flexmonitoring.org/

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

US rural hospitals: emergency department benchmarks

Here are some interesting statistics from iVantage’s 5th Annual Rural Emergency Department Study, which captures data on about 10 percent of the critical access hospitals in the U.S. 

Rural Hospitals: 2011 Data

  • 5.1% of ED patients were admitted
  • 3.2% of observation patients were admitted
  • 122 mins. average total ED time
  • 3.9% transfer rate
  • More than 50% of ED visits were classed as low acuity

Source: Topchik, M.  5th Annual National Rural Health ED Study, June 30, 2012.  Click here for full text: http://www.ivantagehealth.com/5th-annual-national-rural-health-ed-study-summary/

Opportunites and Challenges for Rural Hospitals in an Era of Health Reform

A new Trendwatch report from the American Hospital Association provides a snapshot of the nearly 2000 rural community hospitals that serve a quarter of the nation’s population. Challenges facing rural hospitals include:

  • Rural residents are older, have lower incomes, are more apt to be uninsured, and are more likely to suffer from chronic diseases.
  • Rural health care workers are aging and are nearer retirement age than their urban counterparts. The growing shortage of health workers may have a greater impact on rural facilities.
  • Access issues, such as longer travel distances and lack of reliable transportation, can delay treatment by rural patients, aggravating health problems and leading to more expensive care when received.
  • Rural hospitals are smaller — nearly half have 25 or fewer beds — but must still maintain a broad range of basic services to meet the needs of their communities. Costs per case tend to be higher, because fixed expenses are spread over fewer patients.
  • The shift from inpatient to outpatient care is more pronounced in rural hospitals, and rural hospitals are more likely to offer home health, skilled nursing, and assisted living services. Medicare payment shortfalls are greater for outpatient, home health, and skilled nursing care.
  • 60% of gross revenue in rural hospitals comes from Medicare, Medicaid, or other public programs.
  • Insufficient access to capital affects the abilities of rural hospitals to modernize facilities and acquire new technologies to improve operational effectiveness. Rural hospitals lag their urban counterparts in adoption of  health information technology.

Special Medicare programs, such as critical access hospital, sole community hospital, rural referral center, and Medicare-dependent hospital designations, have been developed to stabilize rural hospitals. The new health reform law has provisions to further help rural hospitals, such as programs to bolster the supply of rural health workers. Health reform’s  expansion of  insurance coverage should reduce uncompensated care costs, but may require upfront investments by rural hospitals to handle the increased demand of new patients. Medicaid enrollment could expand by a third in many rural states, due to the new health reform law, yet Medicaid underpays hospitals for the cost of care.

The report includes several brief case studies focused on what rural areas are doing to address these challenges.

Source: American Hospital Association. The opportunities and challenges for rural hospitals in an era of health reform. Trendwatch, April 2011. http://www.aha.org/aha/trendwatch/2011/11apr-tw-rural.pdf

Posted by the AHA Resource Center, (312) 422-2050, rc@aha.org

Where do rural residents go for hospital care and why?

A recent report from the National Center for Health Statistics explores the factors influencing rural residents’ use of urban rather than rural hospitals for their care. Drawing from 2003 data that includes both the Medicare and non-Medicare population, the study found that about two-thirds of rural resident hospitalizations were in rural hospitals. Among the “crossovers” to urban hospitals were younger patients, those with needs for specialized levels of care, those requiring surgery, and those with mental disorders.

To view the complete report, see http://www.cdc.gov/nchs/data/nhsr/nhsr031.pdf

Source: Hall, M. J., Marsteller, J., and Owings, M. Factors influencing rural residents’ utilization of urban hospitals. National Health Statistics Reports. No. 31. Nov. 18, 2010.