Chartis, a comprehensive healthcare advisory firm, today released new research indicating that 50% of the nation’s rural hospitals are operating at a loss and 418 are vulnerable to closure. Data and insights from “Unrelenting Pressure Pushes Rural Safety Net Crisis into Uncharted Territory” will be presented this week to members of Congress, rural healthcare advocates, and state offices of rural health during the National Rural Health Association’s (NRHA) 35^th annual Rural Health Policy Institute Conference in Washington.

“America’s rural hospitals have been battling against drivers of instability for more than a decade, but this newest research suggests this crisis has accelerated quickly to previously unseen levels,” said Michael Topchik, National Leader, The Chartis Center for Rural Health. “To learn the percentage of rural hospitals in the red has shifted 7% and now includes half of all rural hospitals is startling and should serve as an urgent call to action for everyone invested in rural healthcare.”

“We are seeing a rapidly deteriorating environment for rural hospitals,” said Alan Morgan, NRHA CEO. “Now is time to sound the alarms, rural communities need to know that their hospitals are facing serious headwinds, and Congress needs to act to maintain access to local healthcare.”

For more than a decade, Chartis research has helped quantify the uncertainty endangering rural hospitals and inform the efforts of those working to preserve care in rural communities. This latest study builds upon existing research through updated analysis of key indicators such as rural hospital operating margin, facility closures, and loss of access to care and services such as obstetrics. These findings are accompanied by a new assessment of rural hospital vulnerability and an analysis of the surging popularity of Medicare Advantage in rural communities and its impact on hospital revenue. Key findings from this study include:

• 50% of America’s rural hospitals are operating in the red.
  
  
  
  
• 55% of independent rural hospitals are operating in the red, while 42% of system affiliated rural hospitals are operating at a loss.
  
  
  
  
• Medicare Advantage now accounts for 35% of all Medicare-eligible patients in rural communities. In 7 states, penetration exceeds 50%.
  
  
  
  
• A record 28 rural communities lost access to inpatient care last year as a result of rural hospital closures or conversion to a model excluding inpatient care.
  
  
  
  
• 418 rural hospitals are ‘vulnerable to closure.’
  
  
  
  
• 267 rural hospitals—nearly 25% of America’s rural OB units—dropped OB services between 2011 and 2021.
  
  
  
  
• 382 rural hospitals stopped providing chemotherapy services between 2014 and 2022.

“This study confirms that Medicare-eligible patients in rural communities are increasingly choosing Medicare Advantage plans. This shifting payer mix has emerged as a significant pressure point for rural hospitals that have come to rely on predictable reimbursement rates associated with traditional Medicare,” added Topchik.

Read the Study

“Rural Health Safety Net Faces Deepening Uncertainty Amid Unrelenting Pressure” is available for download at https://www.chartis.com/insights/unrelenting-pressure-pushes-rural-safety-net-uncharted-territory

About Chartis

The challenges facing U.S. healthcare are longstanding and all too familiar. We are Chartis, and we believe in better. We work with over 900 clients annually to develop and activate transformative strategies, operating models, and organizational enterprises that make U.S. healthcare more affordable, accessible, safe, and human. With over 1,000 professionals, we help providers, payers, technology innovators, retail companies, and investors create and embrace solutions that tangibly and materially reshape healthcare for the better. Our family of brands—Chartis, Jarrard, Greeley, and HealthScape Advisors—is 100% focused on healthcare and each has a longstanding commitment to helping transform healthcare in big and small ways. Learn more.

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