A Look at Rural Hospital Closures and Implications for Access to Care: Three Case Studies

A Look at Rural Hospital Closures and Implications for Access to Care: Three Case Studies Jane Wishner and Patricia Solleveld, The Urban Institute Robin Rudowitz, Julia Paradise, and Larisa Antonisse, Kaiser Family Foundation 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 rural communities’ access to health care services. To investigate the factors that contribute to rural hospital closures and the impact those closures have on access to health care in rural communities, the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute conducted case studies of three hospital closures that took place in 2015: Mercy Hospital in Independence, Kansas; Parkway Regional Hospital in Fulton, Kentucky; and Marlboro Park Hospital in Bennettsville, South Carolina. Two of these hospitals were in states that did not adopt the Medicaid coverage expansion under the Affordable Care Act (ACA) (Kansas and South Carolina), while one of the hospitals was located in a Medicaid expansion state (Kentucky). Key findings include the following: A number of factors contributed to the rural hospital closures, including aging, poor, and shrinking populations, high uninsured rates and a payer mix dominated by Medicare and Medicaid, economic challenges in the community, aging facilities, outdated payment and delivery system models, and business decisions by corporate owners/operators. The hospital closures reduced local residents’ access to care, especially emergency care. While inpatient hospitals in these and other communities may not be sustainable, without new models of health care delivery in place, hospital closures can lead to gaps in access. The closures led to an outmigration of health care professionals and worsened pre-existing challenges around access to specialty care. Some communities were able to adapt to fill in gaps in access to primary care. Elderly and low-income individuals were more likely than others to face transportation challenges following the closures, and were thus more likely to delay or forgo needed care. New care models may be better able to address the health care needs of rural communities. Some rural hospitals may be able to adapt and new models may be created to address changing demographics and delivery systems. Such reconfiguration may require federal support and assistance as well as regional planning efforts. A state’s decision about the Medicaid expansion has an important impact on hospital revenues and access to care, but the sustainability of rural hospitals depends on a broader set of factors. A Look at Rural Hospital Closures and Implications for Access to Care 2 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.1 To investigate the factors that contribute to rural hospital closures and the impact of those closures on access to health care in rural communities, the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute conducted case studies of three hospital closures that took place in 2015: Mercy Hospital in Independence, Kansas; Parkway Regional Hospital in Fulton, Kentucky; and Marlboro Park Hospital in Bennettsville, South Carolina. In selecting hospital closures for study, we limited ourselves to hospitals that: 1) had closed recently, 2) had not converted to another type of facility (e.g., an urgent care facility) following the closure; and 3) had been reimbursed by Medicare under the prospective payment system (PPS) through predetermined fixed reimbursement rates, not on a cost basis. We applied these criteria to enhance our understanding of the immediate impacts of complete rural hospital closures on community access to care, and to eliminate the effect of Medicare reimbursement type as a confounding factor in our analysis. Also, because we wished to examine the role of state decisions about whether or not to expand Medicaid to nonelderly adults under 138% of the federal poverty level under the Affordable Care Act (ACA), we selected two hospital closures that took place in states that did not expand Medicaid (Kansas and South Carolina) and one closure that took place in a Medicaid expansion state (Kentucky).2 For each case study, we conducted 6-8 interviews with community stakeholders, including nearby hospitals, community health centers, provider associations, health plans, public officials, and local business leaders. We also reviewed publicly-available materials related to the closures and, where available, state and regional rural health analyses and planning initiatives, and interviewed state and national rural health experts to gain perspective on these closures in the context of broader trends. The case studies addressed th