1. The Importance of Rural Hospitals

There are two very different types of hospitals in America: (1) large and urban hospitals, and (2) small rural hospitals. The more than 1500 small rural hospitals represent 35% of all the short-term general hospitals in the country, but they receive less than 5% of total national hospital spending.

Small rural hospitals provide most or all of the healthcare services in the small communities they serve. Small rural hospitals deliver not only traditional hospital services such as emergency care, inpatient care, and laboratory testing, but also rehabilitation, long-term care, maternity care, home health care, and even primary care. The majority of the communities they serve are at least a 25-minute drive from the nearest alternative hospital, and many communities have no alternate sources of healthcare.

Small rural hospitals are struggling to survive and rural communities are being harmed. The majority of small rural hospitals are losing money delivering patient services. More than 130 rural hospitals have closed in the past decade, and most of these were small rural hospitals. In most cases, the closure of the hospital resulted in the loss of both the emergency department and other outpatient services, and residents of the community must now travel much farther when they have an emergency or need other healthcare services. This increases the risk of death or disability when accidents or serious medical conditions occur, but it also increases the risk of health problems going undiagnosed or inadequately treated due to lack of access to care.

Residents of urban areas can also be harmed by rural hospital closures. Most of the nation’s food supply and energy production comes from rural communities. Farms, ranches, mines, drilling sites, wind farms, and solar energy facilities cannot function without an adequate, healthy workforce, and people are less likely to live or work in rural communities that do not have an emergency department and other healthcare services. Many popular recreation, historical, and tourist sites are located in rural areas, and visitors to those sites need access to emergency services if they have an accident or medical emergency.

The Two Types of Hospitals in America

The United States spends more than $1 trillion per year on hospital services.1 Hospitals receive 39% of total healthcare spending, more than any other healthcare sector.

In the decade between 2008 and 2018, spending on hospital services increased by 64%, far more than spending increased on either physician services (51%) or prescription drugs (40%)2, and far more than the 43% growth in national personal income during the same period.3

It will be almost impossible to make health care or health insurance more affordable unless methods are found to control and reduce the amount spent on hospital care. However, proposals to reduce payments to hospitals have met with strong resistance because of concerns about reducing patients’ ability to obtain high-quality care in a timely fashion. Hospitals save the lives of thousands of individuals every year and they provide many types of services that cannot be safely delivered in any other setting. This has perhaps never been clearer than in 2020, when hospitals provided care for tens of thousands of patients with COVID 19, and several communities were forced to erect temporary hospitals in order to ensure there would be adequate hospital capacity to treat all patients who needed care.

As the country searches for policies that will reduce hospital spending while preserving access to quality care, it is essential to recognize that American hospitals fall into two very different categories: (1) small rural hospitals, and (2) large or urban hospitals. These two groups of hospitals differ dramatically, not just in size and location, but in terms of spending, prices, and profits:

  • The majority (55%) of the nation’s more than 4,500 short-term general hospitals have fewer than 100 beds, but they only receive about 10% of total national hospital spending. The hospitals with over 100 beds receive almost 90% of total hospital spending and over 90% of total hospital profits.4

  • Most (71%) of the hospitals with under 100 beds are located in rural communities, whereas the vast majority (84%) of the larger hospitals are in urban areas.5

  • Most of the rural hospitals are very small: 73% had fewer than 15 acute inpatients per day on average in 2018-19, whereas only 13% of urban hospitals had so few patients. One-third of urban hospitals had an average daily acute census of more than 150 patients in 2018-19, but less than 1% of rural hospitals had that many patients.6

  • Pricing policies differ significantly between small rural hospitals and larger hospitals. In 2018, the prices most large hospitals charged for their services were more than 4 times what it cost them to deliver the services, whereas most of the small rural hospitals charged less than 2 times the cost they incurred to provide services.

  • The majority of large hospitals in both urban and rural areas make significant profits (more than 10%) on patient services. In contrast, the majority of small rural hospitals lose money on the services they deliver to the patients in their communities. As a result, the large and urban hospitals receive almost all of the hospital profits in the country.

Clearly, there are very significant differences between small, rural hospitals and other hospitals. Failure to recognize these differences when creating programs and policies to control hospital spending or encourage higher-value care could seriously harm small rural hospitals and the communities they serve.

Figure 1-1

Two Types of Hospitals in the United States

Characteristics of Hospitals

Source: CMS Provider of Services Files and Hospital Cost Reporting Information System

The Importance of Rural Hospitals to Rural Communities

Why Rural Hospitals Are Small

Across the U.S., there are over 1,500 rural hospitals with fewer than 15 acute inpatients per day on average. Most of these hospitals are small because the communities they serve have a small number of residents. There are hundreds of small rural hospitals because most of the country consists of small communities. The majority of the counties in the U.S. have fewer than 26,000 residents.7 In counties this small, the number of people requiring a hospital admission during the course of a typical day would only result in 14-15 patients in beds at the local hospital.8 In the smallest counties, the average number of people needing to be hospitalized would be even lower.9

Rural Hospitals Provide Far More Than Inpatient Care

However, it is very misleading to describe rural hospitals solely in terms of the number of inpatient beds they have or the number of acute patients in those beds. Inpatient care represents only a minority of the services delivered by most hospitals, and this is particularly true in small, rural hospitals. In addition to inpatient acute care, all small rural hospitals provide their communities with two other essential services:

  • Emergency care. In 2017, the average small rural hospital saw 7,000 patients in its Emergency Department (ED).10 Although most of these visits are made by residents of the community, the hospital ED also provides care for individuals who work in the community, are visiting, or are merely passing through.

  • Laboratory tests and imaging studies. A hospital’s laboratory and radiology services are available to any individual in the community who needs a lab test or imaging study, not just those who visit the ED or are admitted to the hospital.

In addition, the majority of small rural hospitals also provide:

  • Primary care. Over 60% of small rural hospitals operate one or more Rural Health Clinics, and an additional 20% operate some other type of medical clinic for patients. The Rural Health Clinics operated by small rural hospitals have an average of 19,000 patient visits per year.

  • Surgery. Over 80% of small rural hospitals offer at least outpatient surgeries or short-stay procedures.

  • Rehabilitation. In addition to outpatient physical therapy services, over 85% of small rural hospitals offer inpatient Skilled Nursing Facility (SNF) services so that community residents can receive rehabilitation in their own communities.

  • Long Term Care. In addition to skilled nursing care, over 70% of small rural hospitals offer long-term nursing care or assisted living services.

A subset of small rural hospitals provides additional services beyond those described above:

  • Maternity Care. Over one-third of small rural hospitals deliver babies and provided basic maternity care.

  • Ambulance. Although most rural communities rely on community or volunteer-operated Emergency Medical Services, it has become increasingly difficult to find enough volunteers to deliver EMS services, particularly in remote areas where each ambulance trip is very lengthy. As a result, more than 20% of small rural hospitals operate an ambulance service.

  • Home Health and Hospice. 19% of small rural hospitals operate a home health agency and 10% operate a hospice program in order to enable community residents to receive health care and/or palliative care services in their homes. Although many other rural hospitals would like to provide these and other additional services to their communities, they may not be able to do so because they do not have the resources to start the service and/or they cannot sustain the services financially.

Limited Alternative Sources of Health Care

In most counties where small rural hospitals are located, the rural hospital is the only hospital in the entire county. In contrast, in most of the counties where large urban hospitals are located, there is at least one and generally two or more other hospitals located in the same county. Some rural counties have two or more small hospitals simply because the county is so large in terms of land area or so problematic in terms of topography, and each of the hospitals serves as the sole hospital for the subset of the county that it serves. Moreover, in many rural areas, the rural hospital is not just the sole provider of hospital services, but the sole or primary source of all healthcare services in the community. In contrast to urban areas, in many rural areas:

  • there is no urgent care center as an alternative to the hospital ED;

  • there is no separate clinical laboratory or imaging facility;

  • there is no other nursing home or assisted living facility for seniors;

  • there is no other home health agency willing or able to provide services to the community because of the difficulty and cost of delivering home health services in sparsely-populated areas; and

  • there are few, if any, alternative sources of primary care in the community.

95% of the counties in which small rural hospitals are located are designated by the Health Resources and Services Administration (HRSA) as Primary Care Shortage Areas in part or all of the county.

Distance from Other Sources of Healthcare

The significance of this is even greater when one realizes how remote many rural communities are and how far the residents would have to travel to find alternative sources of care. There are more than 1,100 hospitals in the country that are at least a 30-minute drive from the nearest alternative hospital, and more than 270 of them are at least a 45-minute drive away.11 The majority of these isolated hospitals are small rural hospitals.

Moreover, the distance between hospitals does not necessarily reflect the distance or time for all of the individuals served by rural hospitals. Although the travel time from the rural hospital to an alternative hospital may be a reasonable estimate of the travel time for the residents of the town where the rural hospital is located, many people who rely on a rural hospital live outside of the town where the hospital is located. If an individual lives 15 minutes away from the rural hospital, an alternative hospital that is 30-45 minutes away from the current rural hospital might then be as much as 45-60 minutes away for that individual.12

In the majority of cases, the next closest hospital to these rural communities is not a large hospital but another small rural hospital. In farming and ranching areas with low population densities, people live and work in small communities that are widely separated, and a network of small rural hospitals is needed in order to provide accessible healthcare services for the residents and workers.

Delays in Receiving Emergency Care

The most obvious benefit of having a hospital close by is when an individual experiences a medical emergency, such as a serious injury or symptoms of a heart attack or stroke, and they need to quickly reach an emergency room. In serious cases, even short delays in treatment can be problematic, and a delay of 30-45 minutes or more in receiving treatment could result in a death or serious disability that could have otherwise been prevented.

Although a helicopter ambulance could potentially transport an emergency patient to an alternative hospital more quickly than the time required to drive to a local hospital, this depends on whether a helicopter ambulance is available and whether the weather is safe for flying. A helicopter ambulance trip is extremely expensive, so the cost of this service will be much higher than a visit to a nearby emergency room. Many patients with non-life threatening injuries, chest pain, or other symptoms will not need surgical intervention or other types of treatment that can only be provided at tertiary or quaternary hospitals, and it is much more cost-effective to triage and treat these cases in a local hospital than at a distant hospital that requires air transport to reach.13

Failure to Receive Other Forms of Care

Patients who are not experiencing an emergency would also have to travel farther to receive many types of diagnostic and treatment services if there is no nearby hospital. The greater the time, distance, and cost of travel, particularly during the winter or bad weather, the less likely it is that patients would obtain those services in a timely fashion. Delays in diagnosis or treatment could result in more serious health problems and more expensive treatment than if the patient had been able to obtain services more easily and quickly. For example:

  • Primary Care. As noted earlier, the majority of small rural hospitals operate one or more Rural Health Clinics, and they generally do so because there would otherwise be a shortage of primary care practices in the community. Access to primary care is increasingly recognized as essential for preventive care and early identification and treatment of health problems. However, patients are far less likely to make visits to a primary care provider if they have to travel a long distance to do so, and the resulting delays in diagnosis and treatment can result in higher healthcare costs in the longer-term.

  • Maternity Care. There is growing concern about the high rates of both maternal death and infant mortality in the country, both of which are significantly higher in rural areas.14 Successfully addressing these problems requires that women receive regular prenatal care during pregnancy and that both the mother and infant receive high-quality care after birth, but these services are less likely to be available in a community that lacks primary care and obstetric care. It is also important that women with higher-risk pregnancies receive timely, high-quality care during childbirth, and that is less likely if the woman has to travel a long distance to reach a hospital.

  • Laboratory Testing. The highest-volume service at most hospitals, both urban and rural, is laboratory testing. Many patients with chronic conditions such as diabetes and heart disease need regular testing in order to properly manage their conditions, and failure to do so can lead to serious complications. In addition, many diseases can only be accurately diagnosed through appropriate laboratory testing, and delays in testing can result in delayed or incorrect treatment. This can not only harm the patient, but if the patient has an infectious disease (such as during the coronavirus pandemic in 2020), delayed or inaccurate diagnosis and treatment can harm many others in the community.

Example: Forks Community Hospital

Forks is a small town in the Pacific Northwest that is located on the western side of the Olympic National Park. Many people have heard of Forks because it was the setting for the popular Twilight Saga novels written by Stephenie Meyer that were also made into a series of movies. Thousands of tourists visit the area every year for fishing, hiking, or other recreation, and the timber industry also still has a significant presence in the community.

Forks Community Hospital is the only hospital in Forks and the surrounding area. It is a small Critical Access Hospital with 25 licensed beds but an average daily acute census of less than 4 patients. Although the estimated population of Forks was only 3,862 in 2018, it is the closest hospital for a group of communities with over 10,000 residents in total. As a result, its Emergency Department has more than 5,000 visits per year, and its two Rural Health Clinics have 17,000-19,000 patient visits each year. Forks Community Hospital is one of the minority of rural hospitals that still offer maternity care services. Forks Community Hospital also operates a nursing facility so that elderly residents of the community can receive long-term care close to their families and friends.

The next-closest hospital to Forks is the Olympic Medical Center in Port Angeles, which is a 70-minute drive. The travel time is even longer for patients who don’t live directly in Forks. For example, for people who live or work in LaPush on the Pacific Coast, Forks Hospital is more than 20 minutes away, and travel to the Olympic Medical Center would require a more than 90-minute drive. Forks Hospital is also the closest hospital to the Clallam Bay Correction Center, one of Washington State’s most secure prisons. The Clallam Bay Correction Center is a 38-minute drive to Forks Community Hospital, whereas it would take over 70 minutes to reach the Olympic Medical Center in Port Angeles, an additional delay of more than a half hour.

Despite the key role it plays in the community, Forks Community Hospital loses a significant amount of money on its patient services. Every year between 2012 and 2019, patient service revenues fell short of costs by 7%-17%. The hospital has only been able to continue operating because it is supported by a local property tax levy. This means that, in addition to paying premiums on their health insurance and paying deductibles and copayments for healthcare services, the residents of the community have to tax themselves in order to keep the hospital open and enable the continuation of healthcare services in their community.

Figure 1-2

Hospitals Closest to Forks

Hospitals Closest to Forks

The red lines show the most direct driving routes from Forks Community Hospital to the next-closest hospitals and the estimated driving times.

Figure 1-3

Communities Closest to Forks

Communities Closest to Forks

The gold lines show the most direct driving routes to Forks Community Hospital from the closest communities and the estimated driving times.

The Importance of Rural Hospitals to the Rest of the Country

The more than 1,500 small rural hospitals represent over one-third of the total hospitals in the country. However, most people have never seen one of them in person because most people don’t live in the rural counties they serve. In fact, the majority of the nation’s population lives in a relatively small number of urban counties, and most of those counties are many miles away from the communities served by rural hospitals.

Should residents of urban areas care what happens to hospitals in small, distant rural communities? The answer is yes, for several reasons:

  • Food Supply. Most of the nation’s food supply comes from rural communities because of the large amounts of land needed to grow crops and raise cattle. Rural hospitals provide healthcare services to the owners and workers on the farms and ranches in these areas, to the owners and workers at the businesses that supply the farms and ranches, and also to their family members. Most of these hospitals are small because of the low population densities in agricultural areas.

    • 38% of agricultural crops are produced in counties in which the only hospitals are small rural hospitals. An additional 4% of crops come from counties that have no hospital at all and the closest hospital is a small rural hospital in another county.15

    • 47% of the country’s production of animals for food occurs in counties in which the only hospitals are small rural hospitals. An additional 6% are in counties that have no hospital at all and the closest hospital is a small rural hospital in another county.

  • Energy Production. Rural communities are home to most of the nation’s coal mining and gas and oil production, as well as wind farms and solar energy facilities. 40% of those communities rely on small rural hospitals for healthcare services. 35% of the country’s mining and oil and gas production occurs in counties in which the only hospitals are small rural hospitals. An additional 6% of fossil fuel production comes from counties that have no hospital at all and the closest hospital is a small rural hospital.16

Figure 1-4

Agricultural and Mining/Oil/Gas Production
in Counties Dependent on Rural Hospitals

Agriculture and Energy Production in Counties with Rural Hospitals

Source: 2017 Census of Agriculture, BEA 2018 Gross Domestic Product by County, CMS Provider of Services Files. “Close to Small” means the county has no hospital and the closest hospital is a small rural hospital.

  • Recreation and Tourism. Many popular recreation, historical, and tourist sites are located in rural areas. If visitors to these sites have accidents or health problems that require medical treatment, their initial care will often be provided by a small rural hospital. For example, the top 10 most-visited National Parks, including the Grand Canyon, Yosemite, and Yellowstone, had almost 50 million visits in 2019, and all are located in rural areas.17 For 7 of these, the closest hospital to all of the entrances and visitor centers at the Park was a small, rural hospital, while the closest large hospital was over 90 minutes away in the majority of cases.18
  • Shipping and Other Travel. Interstate highways connect the nation’s urban areas to each other, to the nation’s agricultural areas, and to recreation sites, and they pass through rural areas to do so. A trucker, traveler, or tourist who has an accident or medical problem on an interstate highway is likely to depend on a small rural hospital located near a highway interchange for emergency care.

The coronavirus pandemic in 2020 made many city dwellers realize for the first time how dependent they are on rural communities for their food supply and how much that supply could be affected by health problems in rural communities.19 The pandemic has also made healthy individuals all across the country realize how important it is to have hospitals with adequate capacity, not only where they live or work, but where they might be quarantined during travel.

Example: Hospitals in Eastern Washington State

One of the largest agricultural areas in the U.S. is located in Washington State east of the Cascade Mountains. This region produces over $8 billion in agricultural products each year, including almost half (49%) of the nation’s apples, 18% of the potatoes, and 8% of the country’s wheat, as well as other fruits, vegetables, grains, and livestock. The 20-county region includes 2 of the top 10 counties in the country in terms of total agricultural sales, 7 of the top ten apple-producing counties in the country, 4 of the top 10 wheat-producing counties in the country, 3 of the top 10 potato-producing counties in the country, and 2 of the top 10 vegetable-growing counties in the nation.20

This area is also a popular destination for tourists and vacationers because of the Cascade Mountains, the Columbia River, and other natural features.21

Figure 1-5

Hospitals in Eastern Washington State

Hospitals in Eastern Washington State

Ready access to quality healthcare in this area is particularly important for the nearly 200,000 farmworkers who support the agricultural industry, including more than 50,000 migrant workers, since injuries are common on farms and ranches because of the manual nature of the work. For example, farm workers must stand on ladders to pick apples by hand. Tourists and visitors also experience injuries while boating, hiking, and skiing.

As shown in the map of the area, 38 hospitals provide services in the region. The largest hospitals are located at the eastern end of the region in Spokane, and in the southern and southwestern portions of the region (in Kennewick, Richland, Walla Walla, Wenatchee, Yakima, and Lewiston, Idaho).

Most (27) of the hospitals are Critical Access Hospitals with 25 or fewer beds. They are primarily located in the northern and central parts of the region and in the southeastern and southwestern corners. The majority of these small hospitals have an average of less than 4 acute inpatients per day, but inpatient care represents only a small proportion of the healthcare services the hospitals provide to their communities. In addition to 24-hour emergency care at all of the hospitals (the majority have over 5,000 ED visits per year), 80% of the hospitals provide skilled rehabilitation and long-term nursing care services, three-fourths offer surgery services, half offer maternity care services, two-thirds operate one or more Rural Health Clinics, and an additional 20% provide some other kind of outpatient clinic services.

Over two dozen small hospitals might seem like a lot for a region with 1.6 million residents until one realizes that those residents are spread out across a 42,000 square mile region, most of which is farmland. Six of the 20 counties have fewer than 10 residents per square mile. Moreover, it would be impossible to have fewer, larger hospitals in the northern and central portions of the region because the topography – mountain passes, deep river gorges, and canyons – would prevent most people from using them.

For example, the first map below shows the communities and hospitals in the Columbia River valley from Wenatchee north to Tonasket and east to the Grand Coulee Dam and Republic. The seven small Critical Access Hospitals in the area are each at least a half hour drive away from the next-closest hospital, which in almost every case is yet another small Critical Access Hospital. The closest large hospital to these communities is in Wenatchee, which requires a 1-2-hour drive along two-lane roads from most of the communities.

Similarly, in the central and southern portions of the region, ten 25-bed Critical Access Hospitals and one 50-bed hospital (designated by Medicare as a Sole Community Hospital) provide emergency care, inpatient and outpatient hospital care, and primary care to farming communities, tourists, and those traveling along Interstate 90. As shown in the second map, each of these hospitals is a half-hour or more away from the next-closest hospital, which in many cases is another small Critical Access Hospital. Many farmworkers and tourists in the areas served by each hospital already have to travel a distance to reach that hospital, and an alternative hospital could be an hour away. For example, Dayton General Hospital is a half hour drive from the Bluewood Ski Resort, and it would take over an hour to reach the next closest hospital in Walla Walla.

The majority of the small rural hospitals in Eastern Washington State lose money on patient services. In contrast, most of the larger hospitals make profits on patient services. In most cases, the small hospitals are only able to continue operating because they are structured as Public Hospital Districts and local residents and businesses tax themselves to keep the hospitals open.22

Figure 1-6

North Central Washington State

North Central Washington State

The red lines show the most direct driving routes between the hospitals and the estimated travel times.

Figure 1-7

Southeastern Washington State

Southeastern Washington State

The red lines show the most direct driving routes between the hospitals and the estimated travel times.

The Problem of Rural Hospital Closures

Many small rural hospitals have closed over the past decade, and the rate of closures has accelerated in the last few years. Because of the important role small rural hospitals play individually and collectively, these closures have the potential to create serious negative impacts both for the communities they serve and for the national economy.

How Many Small Rural Hospitals Have Closed?

The most up-to-date data on rural hospital closures are maintained by the Cecil G. Sheps Center for Health Service Research at the University of North Carolina. When the Sheps Center identifies a potential closure, it investigates to determine whether the hospital has actually closed, has reduced services, or has merged with or been acquired by a larger system, and it also monitors over time to identify whether a closed hospital later reopened.23

The Sheps Center reports that more than 130 rural hospitals closed from 2010 through 2020. There were 18 closures in 2019, more than in any year in the previous decade, and there were 17 more closures in 2020.

The majority of these rural closures were small hospitals. More than 40% of the hospitals that closed had 25 beds or less, while only 11% had more than 100 beds. 89% of the hospitals that closed had an average daily census of less than 15 prior to closure, and nearly 60% had an average daily census of less than 5.

Figure 1-8

Rural Hospital Closures

Rural Hospital Closures

Source: University of North Carolina, Cecil G. Sheps Center for Health Services Research

The Impacts of Closures on Rural Communities

However, the total number of rural hospital closures reported by the Sheps Center is only a rough indication of the severity of the closure problem, and the change in the total number is not the best way to measure how the impact of closures is changing. Not all rural hospitals are alike, and the impacts of closures can differ dramatically from one community to the next, so the aggregate impact of closures is not necessarily proportional to the number of hospitals that have closed.

Closures Close to Other Hospitals

For example, a number of the reported closures over the past decade have likely had a relatively small impact on their community:

  • In 11% of the closures, the hospital didn’t completely shut down, and there is still an emergency room and other services operating at the same location.24 The hospital is classified as “closed” because it stopped offering inpatient care, and therefore it can no longer be considered a hospital, even though community residents can still receive the same kinds of emergency and outpatient services they received in the past.

  • In an additional 13% of the closures, another hospital is located less than a 15-minute drive from the hospital that closed.25 In almost 90% of these cases, the next-closest hospital is a larger hospital than the hospital that closed, and the majority have positive financial margins. In some cases, there were two hospitals in the same town, so there was still a hospital in the same community even after one closed. For example, one rural hospital that closed was a small physician-owned hospital that had been located a block away from a larger facility that still continues to operate.26

Of course, even a 15-minute drive could be problematic for people in the community who lived near the closed hospital and do not have transportation to reach the alternative hospital. On the other hand, people who live in between the closed hospital and another hospital may have to travel only a small additional distance to reach the alternative hospital.

Closures Far from Other Hospitals

At the other extreme, in more than 25% of the closures in the last decade, there was no longer an ED in the community and the nearest alternative hospital was more than 30 minutes away. Some people who already had to travel a distance to reach the hospital that closed now have to travel 45 minutes or more to reach a hospital.

In 80% of these cases, the community not only lost emergency department and inpatient services, there are no longer any outpatient services at all being delivered. Moreover, in many cases, the next-closest hospital is smaller than the hospital that closed, and so the time required to reach a hospital with equivalent services may therefore be even longer than 30 minutes.

The Remaining Closures

The circumstances surrounding the remaining hospital closures are in between these two extremes. In about half of the cases where a rural hospital closed, there is no longer a 24-hour ED, but there is another hospital within a 15-minute to 30-minute drive of the hospital that closed. The implications of this distance vary from community to community:

  • In some cases, outpatient services continue to be offered at the site of the closed hospital, although not a 24-hour ED. However, in most cases, all hospital services were terminated and the residents of the community need to travel 15-30 minutes to a hospital in another community for all or most of the outpatient services they received locally before.

  • In the majority of the cases, the next-closest hospital is a larger hospital than the hospital that closed. However, in some cases, the next-closest hospital is a smaller hospital than the hospital that closed, and reaching a hospital of equal or larger size requires traveling more than 30 or 40 minutes rather than only 15-30 minutes.

  • As discussed previously, the travel time from one hospital to an alternative hospital does not accurately measure the difference in travel time for people in outlying communities. In the majority of cases where the next-closest hospital is 15-30 minutes away, some people would now have to travel more than 30 minutes to reach a hospital. This could well create disparities in health and healthcare access for residents of the area, or exacerbate existing disparities, based on their access to transportation and other factors.

Summary of Closure Impacts

In summary, rural hospital closures over the past decade fall into the following four categories:

Figure 1-9

Impacts of Rural Hospital Closures

Categories of Closed Hospitals

  1. Limited Impact on Emergency Care. In about one-fourth of rural hospital closures, the impact has likely been limited, either because there is still an ED at the same site or another hospital is less than 15 minutes away from the hospital that closed.

  2. Moderate Impact on Emergency Care. In about one-eighth of cases, some outpatient services continue to be offered at the site (typically including some type of urgent care), but residents need to travel a total of at least 15-30 minutes to reach a 24-hour ED or to receive inpatient services.

  3. Moderate Impact on All Outpatient Care. In one-third of cases, residents of the community where the hospital closed have to travel 15-30 minutes to receive both 24-hour ED services and other types of hospital outpatient services, and some residents of surrounding areas have to travel 30 minutes or more. Over 1.2 million people live in these communities.

  4. Large Impact on Emergency Care and Other Services. The remaining closures, representing more than one-quarter of the total, have likely created the largest negative impacts overall, because there is no longer a 24-hour emergency department in the community and generally no outpatient hospital services at all, and the next-closest hospital, particularly a hospital of equivalent size and services, is over 30 minutes away. Over 1 million people live in these communities.

As discussed earlier, delays in receiving emergency services have the potential to cause death or disability for people who are injured or experiencing a heart attack or stroke. Studies have found that mortality rates for heart attack, stroke, respiratory problems, and life-threatening injuries are higher for people who have to travel farther to reach a hospital emergency department.27 Because of the greater travel times in rural areas, closure of a small rural hospital is likely to have a greater negative impact than closure of a small hospital in an urban area; in fact, a study of hospital closures in California found that closures of rural hospitals increased mortality for both heart attacks and strokes, but closures of urban hospitals had no negative impact on mortality.28 Several studies have found that mortality rates for heart attacks were as much as 30% higher following closures of emergency departments that increased travel times by 30 minutes or more, with more limited impacts when travel times increased by 10-30 minutes.29 As a result, closures that fall into Category 4 above are likely to have more negative impacts on mortality than those in the other categories.30

Additional negative impacts can be caused by the reduction in non-emergency services resulting from closure of a small rural hospital. Increases in the time required to obtain lab tests and other outpatient services can discourage people from obtaining those services in a timely fashion, which in turn can result in failure to diagnose and treat their health problems in a timely fashion. These impacts are more difficult to measure because they will involve a variety of different health conditions and they are likely to accrue over a longer period of time. One study found that patients with colon cancer who had to travel more than 50 miles for diagnosis were significantly more likely to have advanced disease at the time of diagnosis.31 Another study found that rural counties not adjacent to urban areas that lost hospital-based obstetric services had significant increases in preterm births.32 Hospital closures in Category 4 above are likely to have the largest negative impacts, since in most cases outpatient services have been eliminated and an alternative site of outpatient care is a long distance away.

Finally, loss of a hospital can negatively impact the economy of the community, not only because of the loss of jobs from the hospital itself, but because it is more difficult to attract and retain businesses and workers in other industries.33 Here again, the impact depends on the nature of the closing; one study of rural hospital closures found significant reductions in per capita income and significant increases in unemployment in communities that lost their sole hospital but not in communities with alternative sources of hospital care.34

Negative Impacts of Rural Closures Have Been Increasing

Clearly, rural hospital closures in Category 4 (i.e., where there is no longer a 24-hour ED in the community and the next-closest hospital is over a half-hour away) are of far greater concern than closures in Category 1 because of the much larger negative impacts they will have on the communities where they are located. The proportion of closures falling into this highest-impact category has increased over time: one-third of the closures between 2016 and 2020 were in this category, compared to only 21% from 2010-2015, and so the total number of people affected also increased significantly.

The second-largest impacts are likely associated with the closures in Category 3, where there are no ED or outpatient services remaining and an alternative hospital is at least 15-30 minutes away. About one-third of the rural hospital closures fell into this category in both the 2010-2015 and the 2016-2020 periods. In contrast, the proportion of hospital closures in the lowest-impact groups (Categories 1 and 2) decreased from 44% in 2010-2015 to 32% in 2016-2020, and the proportion of people living in the communities affected by these types of closures has also decreased.

EXAMPLE: Nye Regional Medical Center

The most isolated hospital that closed in recent years was the Nye Regional Medical Center in Tonopah, Nevada. Tonopah is the county seat of Nye County, the county that is the third-largest in land area in the country outside of Alaska.35 Originally a gold mining town, Tonopah is located near the midpoint of the more than 400-mile drive between Las Vegas and Reno. Although Tonopah has only about 2,500 residents, Nye County has more than 40,000 residents, spread over 18,000 square miles of land.36

Figure 1-10

Nye Regional Medical Center

(With Surroundings in Nevada and California)

Nye Regional Medical Center

The red lines show the most direct driving routes between the hospitals and the estimated travel times.

The hospital closed in 2015 after years of financial problems and filing for bankruptcy in 2013.37 As shown in the map of the area, the closest hospitals to the community are over two hours away in northern California and Nevada, and more than a three-hour drive is required to reach the hospitals in Las Vegas.

The Emergency Department provided emergency treatment both for residents of the community and for travelers on U.S. 95, the major north-south route through western Nevada that passes through the town. The hospital also served as a principal source of primary care and outpatient services for community residents. Although ambulance services have been enhanced and clinics were established in an effort to fill some of the gaps in healthcare services caused by the closure, the area still has no 24-hour emergency treatment facility and lacks many other healthcare services. Local businesses report that the lack of a hospital has made it more difficult to attract employees, and that workers may have to take off a day or more of work in order to get more than basic medical testing.38 The residents of the community have formed a hospital district supported by local property taxes in the hope of being able to reopen a hospital in the community.39

EXAMPLE: DeQueen Medical Center

The DeQueen Medical Center closed in May 2019, after having financial difficulties for many years.40 The 25-bed Critical Access Hospital was the only hospital in DeQueen, Arkansas and surrounding Sevier County, which are located in the southwestern corner of the state next to Oklahoma.

Figure 1-11

DeQueen Medical Center

(With Surroundings in Arkansas
and Eastern Oklahoma)

Nye Regional Medical Center

The red lines show the most direct driving routes between the hospitals and the estimated travel times.

As shown in the map of the area, the closest emergency rooms and other hospital services are now 40 minutes away for the 6,500 residents of DeQueen and the more than 5,000 additional people who live in the immediately surrounding community. The median income in Sevier County is below the national average and the poverty level is higher than average, so it is likely that many residents will have difficulty traveling that far in order to receive healthcare services. The three closest hospitals are also small Critical Access Hospitals that have experienced financial losses in recent years.

As the coronavirus spread across the nation in 2020, the lack of a hospital in DeQueen was particularly problematic because Pilgrim’s Pride operates a large poultry processing plant there, and poultry and meatpacking plants were sites of significant outbreaks of COVID-19.41 At the end of June, 2020, Sevier County had had more than 700 COVID-19 cases, representing one of the highest per capita infection rates in the U.S.42

Sevier County has issued bonds to finance construction of a new hospital43, but it is unclear whether or how the new hospital will avoid the financial problems that caused the previous hospital to close.

Will the Future Be Better or Worse for Small Rural Hospitals?

The data show that not only has the total number of rural closures been increasing in recent years, the overall impact of the closures has increased even more. Many small rural hospitals have been losing money on patient services in recent years, creating a serious risk that many more rural hospitals will close in the future, reducing access to healthcare for many more rural residents. In 2019 and the first half of 2020, in addition to the 29 rural hospitals that closed, an additional 34 rural hospitals declared bankruptcy.44 Like all hospitals, small rural hospitals experienced higher costs and significant losses of revenue during the pandemic in 2020, but most small rural hospitals had far less in financial reserves to cover those costs and losses than larger hospitals, and this could well accelerate bankruptcy and closure for many small hospitals. Solving the problems facing rural hospitals requires a clear understanding of what is causing them.

  1. U.S. Department of Health and Human Services, Center for Medicare and Medicaid Services. National Health Expenditure Accounts.↩︎

  2. Between 2008 and 2018, data from the National Health Expenditure Accounts show that the annual percentage increase in hospital spending was higher than the increase in spending on prescription drugs in all but two years (2014 and 2015). From 2015 to 2018, the percentage increase in hospital spending (15.2%) was almost three times as high as the increase in spending on prescription drugs (5.6%).↩︎

  3. U.S. Department of Commerce, Bureau of Economic Analysis. National Income and Product Accounts: Personal Income.↩︎

  4. Spending by hospital bed count is derived from the Hospital Cost Reports that hospitals are required to submit to the Centers for Medicare and Medicaid Services. (U.S. Department of Health and Human Services, Center for Medicare and Medicaid Services. Healthcare Cost Report Information System.) Data on total hospital spending comes from the National Health Expenditure Accounts, op. cit.↩︎

  5. A hospital is considered as being located in a rural community and is referred to as a “rural hospital” if it is located either in a nonmetropolitan county or in a portion of a metropolitan county that has a Rural Urban Community Area (RUCA) code of 4 or greater↩︎

  6. These statistics are calculated using data from the CMS Healthcare Cost Report Information System (HCRIS), op. cit.↩︎

  7. The count is based on county population estimates for 2018 from the U.S. Department of Commerce, United States Census Bureau.↩︎

  8. On average in the U.S., there are about 100 acute hospital admissions per year per 1,000 people, so in a rural county with 25,000 residents, one might expect about 2,500 hospital admissions per year for the residents of the county. (Since rates of hospital admissions vary significantly by age and sex, the actual number would be higher or lower depending on the demographics of the county.) Since a small rural hospital would not be able to handle the most complex patients, not every patient from the county will be admitted to the local hospital. Assuming 70% of the 2,500 admissions could be handled by the rural hospital and the average length of stay is 3 days, this would result in 5,250 total acute inpatient days, or an average daily census of 14.4.↩︎

  9. Most rural hospitals have a licensed bed capacity that is much larger than their average daily acute census for two reasons. First, there is significant and unpredictable day-to-day variation in the number of individuals requiring inpatient care, and the hospital has to maintain adequate capacity to admit patients when they need it. Occupancy levels have to be lower in small hospitals than in large hospitals because of the greater variability in day-to-day utilization. Second, most small rural hospitals use some of their inpatient beds to deliver rehabilitation services and/or long-term nursing care as well as short-term acute care. Moreover, the fact that a hospital is licensed for a certain number of beds does not mean that the hospital will have sufficient staff on duty for all of those beds at times when there are not enough patients to occupy all of them,↩︎

  10. American Hospital Association. Annual Survey of Hospitals, 2017.↩︎

  11. Driving distances and driving times between hospitals were calculated using the Google Maps Distance Matrix API.↩︎

  12. Conversely, individuals who live in between the rural hospital and the alternative hospital may not have to travel much farther to reach the alternative hospital than they do to reach their current hospital.↩︎

  13. Carlson, AP et al. “Low Rate of Delayed Deterioration Requiring Surgical Treatment in Patients Transferred to a Tertiary Care Center for Mild Traumatic Brain Injury.” Neurosurgery Focus 29(5) (2010).
    Fuentes B et al. “Futile Interhospital Transfer for Endovascular Treatment in Acute Ischemic Stroke.” Stroke 46:2156-2161 (2015).
    Newgard, CD et al. “The Cost of Overtriage: More Than One-Third of Low-Risk Injured Patients Were Taken to Major Trauma Centers.” Health Affairs 32(9): 1591-1599 (2013).↩︎

  14. Maron DF. “Maternal Health Care is Disappearing in Rural America.” Scientific American, February 15, 2017.↩︎

  15. U.S. Department of Agriculture, National Agricultural Statistics Service. 2017 Census of Agriculture.↩︎

  16. U.S. Department of Commerce, Bureau of Economic Analysis. Gross Domestic Product by County, 2018.↩︎

  17. U.S. Department of the Interior, National Park Service. Visitation Numbers.↩︎

  18. Most of the top 10 National Parks are very large and have multiple entrances and attractions. In some cases, one part of the park is close to a larger hospital, but in another part of the park, the only nearby hospital is a small rural hospital. For example, the main entrance to the Olympic National Park is in Port Angeles and is only 6 minutes from the Olympic Medical Center, but the Hoh Rain Forest Center on the southwestern side of the Park is nearly two hours from Port Angeles and 46 minutes away from Forks Community Hospital. (Travel times were calculated using the Google Maps Distance Matrix API.)↩︎

  19. Artiga S, Rae M. The COVID-19 Outbreak and Food Production Workers: Who is at Risk? Kaiser Family Foundation, June 3, 2020.↩︎

  20. U.S. Department of Agriculture, National Agricultural Statistics Service. 2017 Census of Agriculture.↩︎

  21. Agriculture in Eastern Washington State is supported either directly by the Columbia River or by the Columbia Basin Project, which is the largest water reclamation project in the country. The Grand Coulee Dam, located in the middle of the region, provides water to the Columbia Basin Project through more than 1600 miles of canals, which in turn provide irrigation water to over 600,000 acres of land. The hydroelectric plants at the Grand Coulee Dam are the largest single power station in the United States. The region also contains the Channeled Scablands that were shaped by Ice Age floods.↩︎

  22. Association of Washington Public Hospital Districts.↩︎

  23. University of North Carolina, Cecil G. Sheps Center for Health Services Research.↩︎

  24. In some cases, a different hospital or other entity took over operations of the emergency services and outpatient services when the inpatient services were terminated.↩︎

  25. Driving distances and driving times between hospitals were calculated using the Google Maps Distance Matrix API.↩︎

  26. Doctors Hospital at Deer Creek, a 10-bed hospital that was located in Leesville, Louisiana, closed in January 2019. It was located 0.3 miles from Byrd Regional Hospital, a 60-bed hospital which continues to operate. Leesville is a rural community near the Louisiana-Texas border which had an estimated population of 5,713 in 2018.↩︎

  27. Harmsen AMK et al. “The Influence of Prehospital Time on Trauma Patients Outcome: A Systematic Review.” Injury 46(4):602-609 (2015).
    Nicholl J et al. “The Relationship Between Distance to Hospital and Patient Mortality in Emergencies: An Observational Study.” Emergency Medicine Journal 24:665-668 (2007).
    Tansley G et al. “Effect of Predicted Travel Time to Trauma Care on Mortality in Major Trauma Patients in Nova Scotia.” Canadian Journal of Surgery 62(2): 123-130 (April 2019).↩︎

  28. Gujral K and Basu A. Impact of Rural and Urban Hospital Closures on Inpatient Mortality. National Bureau of Economic Research Working Paper 26182 (August 2019).↩︎

  29. Shen Y and Hsia RY. “Association Between Emergency Department Closure and Treatment, Access, and Health Outcomes Among Patients With Acute Myocardial Infarction.” Circulation 134(20): 1595-1597 (2016).
    Shen Y and Hsia RY. “Does Decreased Access to Emergency Departments Affect Patient Outcomes? Analysis of Acute Myocardial Infarction Population 1996-2005.” Health Services Research 47(1) Part I:188-210 (2012).
    Hsia RY and Shen Y. “Emergency Department Closures and Openings: Spillover Effects on Patient Outcomes in Bystander Hospitals,” Health Affairs 38(9): 1496-1504 (2019).↩︎

  30. Nationally, most hospital closures have occurred in urban areas, and as shown in the text, some closures in rural communities have occurred where another hospital was nearby or where emergency services continued to be offered even though the hospital was “closed.” As a result, studies that do not differentiate between the circumstances surrounding hospital closures are less likely to show negative impacts on mortality rates or other outcomes. For example, a study that found no significant change in mortality rates following closures of either rural or urban hospitals did not control for differences in the travel time to the next-closest hospital or for whether emergency services continued to be offered at the site of the closed hospital. Moreover, its primary outcome measure was all-cause mortality for Medicare beneficiaries, not mortality for specific conditions that are sensitive to hospital travel time. Although it examined time-sensitive conditions, it only did so for closures overall, not for closures in rural areas. Joynt KE et al. “Hospital Closures Had No Measurable Impact on Local Hospitalization Rates or Mortality Rates,” Health Affairs 34(5): 765-772 (2015).↩︎

  31. Massarweh NN et al. “Association Between Travel Distance and Metastatic Disease at Diagnosis Among Patients With Colon Cancer.” Journal of Clinical Oncology 32(9):942-948 (2014).↩︎

  32. Kozhimannil KB et al. “Association Between Loss of Hospital-Based Obstetric Services and Birth Outcomes in Rural Counties in the United States,” JAMA 319(12):1239-1247 (2018).↩︎

  33. Probst, JC et al. “Economic Impact of Hospital Closure on Small Rural Counties, 1984 to 1988: Demonstration of a Comparative Analysis Approach.” The Journal of Rural Health 15(4): 375-390 (Fall 1999).
    Manlove JL and Whitacre BE. Short-Term Economic Impact of Rural Hospital Closures. Paper presented at the Southern Agricultural Economics Association’s 2017 Annual Meeting, February 4-7, 2017.↩︎

  34. Holmes GM et al. “The Effect of Rural Hospital Closures on Community Economic Health.” Health Services Research 41(2): 467-485 (April 2006).↩︎

  35. U.S. Department of Commerce, United States Census Bureau.↩︎

  36. U.S. Department of Commerce, United States Census Bureau. 2018 Population Estimates.↩︎

  37. Chereb S. “Tonopah Hospital Closes, Leaving Medical Care 100 Miles Away,” Las Vegas Review-Journal, August 21, 2015.↩︎

  38. Johnson B. “Officials Seek to Revive Rural Tonopah Hospital,” Nevada Public Radio, November 22, 2019↩︎

  39. Kyser H. “Four Years Later, Tonopah Recovering from Hospital Closure.” Nevada Public Radio, November 14, 2019.↩︎

  40. King, M. “DeQueen Medical Center Closes Doors, Part of Larger Trend of Closings,” Arkansas Money & Politics, May 8, 2019.
    Stromquist, K. “As De Queen’s Hospital Struggles, Workers, Residents on Edge,” Arkansas Democrat-Gazette, January 13, 2019.↩︎

  41. Artiga S, Rae M. The COVID-19 Outbreak and Food Production Workers: Who is at Risk? Kaiser Family Foundation, June 3, 2020↩︎

  42. Centers for Disease Control, based on July 2, 2020 data. https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/county-map.html↩︎

  43. Bachman M. “County Passes Ordinance to Sell Bonds, Fund Hospital Construction.” The DeQueen Bee, September 14, 2020.↩︎

  44. Ellison A. “22 Hospital Bankruptcies in 2019.” Becker’s Hospital Review, January 6, 2020.
    Ellison A. “29 Hospital Bankruptcies in 2020.” Becker’s Hospital Review, June 3, 2020.↩︎