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Funding Community Projects: Keeping Healthcare in Your Community

Updated March 01, 2019

Paul Thares

SDSU Extension Community Vitality Field Specialist

Vern Hanson, Faulkton Health Care System Board Member
Vern Hanson, Faulkton Health Care System Board Member, sharing the Faulkton Hospital’s success story to a group during the Energize! Conference held in De Smet May 2018.

The number of rural hospital closures has increased significantly in recent years. This trend is expected to continue, raising questions about the impact the closures will have on access to health care services in rural communities (Wishner, Solleveld, Rudowitz, Paradise, and Antonisse, July 2016).

Faulkton’s hospital was getting old. Something had to be done or it would be lost. In a community of 750 people, it might seem that options were few, but not to Vern Hanson and his colleagues. To see a new hospital with clinic attached and nursing home across the street shows that “big dreams in a small town” can become a reality.

Rural Hospital Closures: 15 Things to Know

Here are 15 things to know about rural hospital closures (Ellison, 2016).

  1. More than 60 rural hospitals have closed since 2010, and those closures were spread across more than 20 states, according to the North Carolina Rural Health Research Program.
  2. Across the U.S., 673 rural hospitals are vulnerable to closure, according to a report from iVantage Health Analytics, a firm that compiles a hospital strength index based on data about financial stability, patients and quality indicators.
  3. The 673 rural hospitals vulnerable to shutting down are located across 42 states.
  4. Sixty-eight percent of the hospitals vulnerable to closure are critical access hospitals — a designation that requires certain conditions be met, including being located at least 35 miles from another hospital.
  5. Several factors, including disproportionate share payment cuts and an uneven adoption of Medicaid expansion, have created significant downward pressure on rural hospital margins, according to iVantage.

Where are vulnerable hospitals located?

  1. Southern states have especially high rates of vulnerability when compared to their total number of rural hospitals. States in this region with high rates of vulnerability include Mississippi (79 percent), Louisiana (58 percent) and Georgia (53 percent).
  2. There are no vulnerable rural facilities in eight states and Washington, D.C., according to iVantage.

The Medicaid Expansion-Rural Hospital Closure Link

  1. Although nearly all rural hospitals are feeling the squeeze, facilities in states that have not expanded Medicaid are under more financial pressure. Sixty-three percent of hospitals vulnerable to closure are in states that have not expanded Medicaid.
  2. Hospital closures have sparked interest in Medicaid expansion in some states. For example, in Kansas, the closure of Mercy Hospital Independence (Kan.) last year caused Senate Vice President Jeff King (R-Independence) to take a closer look at the possibility of expanding Medicaid.
  3. Just a few weeks after news broke that Mercy Hospital Independence was closing, several other Kansas hospitals, the Kansas Health Foundation and the Kansas Hospital Association teamed up to urge Kansas Gov. Sam Brownback to expand Medicaid to prevent additional closures. However, despite their efforts, Kansas still has not expanded its Medicaid program.
  4. In Oklahoma, where Medicaid was not expanded, Sayre (Okla.) Memorial Hospital, a 31-bed nonprofit hospital, abruptly closed this month. One of the main contributors to the hospital's closure was the state's decision not to expand Medicaid, according to hospital officials.
  5. According to a study from the University of Michigan in Ann Arbor, within six months of expanding Medicaid services, states experienced a 50 percent drop in care administered to patients without health insurance. "In expansion states, we see exactly what we would expect to happen after Medicaid became available to more people," said Sayeh Nikpay, MD, lead author of the study. "Even in these early months, the shift from uninsured to Medicaid contrasts sharply with the steady demand for uninsured in nonexpansion states. This has implications for the financial status of hospitals," he said.

The Effects of Rural Hospital Closures

  1. Of the 673 hospitals identified as vulnerable to closure in the iVantage study, 355 are in markets with great health disparities. "In other words, many of the hospitals most at risk of closure are located in communities that can least afford to lose access to care," said iVantage.
  2. If the 673 vulnerable hospitals were to shut down, 99,000 healthcare jobs in rural communities across the nation would be lost.
  3. Closure of the at-risk hospitals would result in an estimated $277 billion loss to the gross domestic product, according to iVantage.

The National Rural Health Association shares some data on rural hospital closing.

Faulkton Area Medical Center: Quality Health Care Within Reach. Providing a broad range of medical services and programs, both primary and secondary, to a population of more than 2,600 in Faulkton and the surrounding counties. Visit the Faulkton Hospital website to learn more.