Following the 2016 United States Presidential election, the entire country turned its eye to rural America. Historically overshadowed by increased urbanization and globalization, small towns across the United States suddenly found themselves at the center of dinner table discussions nationwide—and with good reason. Nearly 60 million Americans—almost one fifth of the U.S. population—inhabit rural communities.[1]  In North Carolina in particular, nearly one third of individuals reside in rural areas.[2] An oft-forgotten but significant swath of society became the focus of national attention as small-town voters turned out in droves to make election history. 

Once again, our country finds its focus drawn to the needs of rural America, this time focusing on what stands at the center of small communities nationwide: rural community hospitals. Providing both primary and emergency care, rural hospitals serve as both a healthcare and economic hub in many rural towns. For individuals who are unable to access metropolitan centers of medical care without expending significant time and cost, rural hospitals can serve as literal lifesavers. In addition, they are often significant employers in small towns, providing economic support in addition to quality medical care. 

Despite their central role in rural communities, however, many rural hospitals are struggling financially. High disease rates, aging populations, low rates of health insurance coverage, and inadequate reimbursement are among the factors challenging rural healthcare’s sustainability.

According to the Centers for Disease Control, rural Americans are at greater risk than their urban counterparts of succumbing to the top five leading causes of death: heart disease, cancer, unintentional injury, chronic lower respiratory disease, and stroke.[3] A portion of this risk may be attributable to lifestyle differences. For instance, residents of rural areas have higher levels of cigarette smoking and obesity, are less likely to wear seatbelts, and report less leisure-time activity than urban residents.[4]  In addition, the opioid epidemic targets rural communities, where overdoses contribute to the increased risk of unintentional injury among residents.[5] Environmental factors, such as poorer water quality[6] and greater exposure to vapor-gas, dust, and fumes in rural areas relative to urban communities,[7] may also contribute to the higher disease rate among rural Americans.

 Rural areas also are home to a greater percentage of elderly residents than urban centers.[8] In North Carolina, for instance, from 2012 to 2016 nearly 40% of the population aged 65 and over resided in rural areas.[9] Of course, elderly populations generally have more need for medical and rehabilitative care than their younger counterparts,[10] placing additional demands on rural healthcare providers. Moreover, rural hospitals often have difficulty finding and retaining qualified medical staff who are willing to put down roots in small communities.

Yet despite the great need for reliable healthcare in rural areas, rural Americans are less likely than their urban peers to have health insurance and are more likely to experience poverty. Rural areas have fewer commercial payers compared to urban markets, and commercially insured patients within rural communities are more likely to bypass their local community hospitals for care.[11] In addition, federal programs such as Medicare and Medicaid—from which rural hospitals receive a significant portion of their revenue—frequently reimburse healthcare providers less than the actual cost of the care provided. Rural hospitals thus face a two-fold challenge: an aging population with higher rates of health problems, coupled with an inability of those residents to pay for the care they need. 

The result has been a national rural hospital crisis. Over one third of rural hospitals in the United States are already unprofitable,[12] and 170 rural hospitals have closed nationwide since 2005.[13] Eleven of those were in North Carolina.[14] A February 2019 Navigant study indicates that 21% or 430 rural hospitals in the United States are at high risk of closing unless their financial situations improve.[15] In North Carolina, the study found, 12.8% of rural hospitals were already at risk of closing.[16]

Enter: COVID-19. At a time when many rural hospitals are already financially strapped, a massive pandemic will be insurmountable. With an aging population that has a high percentage of coronavirus risk factors, rural communities may see especially high rates of hospitalization as a result of the pandemic. Coupled with the increased demand for personal protective equipment and other supplies, as well as increased staff hours, costs are skyrocketing. Meanwhile, hospitals have been forced to forego the revenue stream generated by elective procedures—the only thing keeping many rural hospitals afloat financially.

In response, many rural hospitals are increasing their number of ICU beds, examining staff requirements, and attempting to preserve supplies of protective equipment. Unlike many of their urban counterparts, however, rural hospitals often did not begin the crisis in a relatively strong financial position. The longer the pandemic lasts, the more these hospitals’ finances will be strained.

The federal government is attempting to alleviate the financial burden of the novel coronavirus pandemic on healthcare providers nationwide. On March 19, 2020, Congress passed the CARES Act, which will inject $2 trillion into the economy, including $100 billion for hospitals. The CARES Act expands insurance coverage of COVID-19 testing and treatment and also provides a 20% increase in Medicare payments for treating patients with COVD-19. The increase will not cover the full cost of care, however, and for already-struggling rural hospitals, it remains to be seen whether the financial relief will be adequate; other relief measures appear to be on the way.

The federal government also has loosened certain regulatory requirements to allow hospitals and physicians to collaboratively provide care in ways that are otherwise prohibited. For example, hospitals may provide free telehealth software to physician practices to facilitate care. Although such measures may increase the availability of healthcare in the midst of the pandemic, they do nothing to alleviate the financial burden of the rural hospitals providing that care. Moreover, for many rural residents who lack access to high speed internet, telehealth simply is not a viable option.

One alternative model of care that has entered healthcare discussions in recent years may prove useful moving forward: micro-hospitals. Small-scale licensed facilities, micro-hospitals serve as a middle ground between freestanding emergency departments and outpatient physician offices. Typically focusing on core services such as an emergency department, pharmacy, laboratory, and imaging centers, micro-hospitals provide both inpatient and surgical care. Their smaller physical structures reduce the overhead costs associated with large, full-service hospitals yet retain flexibility to expand services as needed within the community. As the novel coronavirus pandemic shines a light on the challenges of rural healthcare, the industry may need to revisit and redouble its consideration of the role that micro-hospitals could have in serving rural communities across the country.

As rural hospitals struggle to survive this pandemic, communities also may turn to free-standing emergency departments as a more cost-effective method of bringing emergency care to smaller towns. Free-standing EDs are structurally separate from hospitals and provide emergency care at a lower cost than full-service hospitals. However, in many areas, the growth of free-standing EDs has been hampered by regulatory restrictions. In North Carolina, for instance, they must be tied to the license of another acute care hospital in the county, or in some cases, a contiguous county. Another currently available option would include operating essentially a freestanding ED in a very scaled-down inpatient hospital model. Permitting freestanding EDs without these licensure restrictions likely would increase local access to affordable care in rural communities.

As our nation continues to adjust to the impact of a health and economic crisis unlike anything the world has seen in decades, it is becoming increasingly clear that this pandemic will impact the delivery of healthcare services long after the virus itself has run its course. Whether through the increased availability of telehealth software or by re-evaluating the efficacy of certain federal healthcare regulations, the healthcare industry is undergoing considerable change. Rural hospitals in particular are shouldering an extremely heavy financial burden to help America emerge from the COVID-19 crisis as quickly as possible.

Some rural healthcare facilities may weather this storm more securely than others, but some certainly will close. However, one thing is certain: the need for local quality healthcare in rural communities will not disappear, and neither will healthcare providers’ commitment to providing it. Although the process may be painful, perhaps the coronavirus pandemic will encourage local and national leaders to focus on the plight of rural hospitals across the country and consider new solutions to a growing problem.

[1] Defining Rural Population, Health Servs. & Resources Admin., https://www.hrsa.gov/rural-health/about-us/definition/index.html (last visited Apr. 5, 2020).
[2] 2010 Census Urban & Rural Classification & Urban Area Criteria, U.S. Census Bureau (Dec. 2, 2019), https://www.census.gov/programs-surveys/geography/guidance/geo-areas/urban-rural/2010-urban-rural.html.
[3] About Rural Health, Centers for Disease Control & Prevention (Aug. 2, 2017), https://www.cdc.gov/ruralhealth/about.html.
[4] Id.
[5] Id.
[6] Heather Strosnider et al., Rural and Urban Differences in Air Quality, 2008–2012, and Community Drinking Water Quality, 2010–2015 — United States, MMWR Surveillance Summaries (June 23, 2017), http://dx.doi.org/10.15585/mmwr.ss6613a1.
[7] Brent C. Doney, et al., Occupational Exposure to Vapor-Gas, Dust, & Fumes in a Cohort of Rural Adults in Iowa Compared with a Cohort of Urban Adults, MMWR Surveillance Summaries (Nov. 3, 2017), http://dx.doi.org/10.15585/mmwr.ss6621a1. 
[8] Amy Symens Smith & Edward Trevelyan, The Older Population in Rural America: 2012–2016, U.S. Census Bureau (September 2019), https://www.census.gov/content/dam/Census/library/publications/2019/acs/acs-41.pdf.
[9] Id. 
[10] Id.
[11] TA Radcliff et al., Understanding Rural Hospital Bypass Behavior, 19 J. Rural Health 252 (2003).
[12] George Pink et al., Geographic Variation in 2016 Profitability of Urban & Rural Hospitals, N.C. Rural Health Res. Program, The Cecil G. Sheps Ctr. for Health Servs. Res., U. of N.C. at Chapel Hill (March 2018). 
[13] 170 Rural Hospital Closures: January 2005 – Present (128 since 2010), N.C. Rural Health Res. Program, The Cecil G. Sheps Ctr. for Health Servs. Res., U. of N.C. at Chapel Hill, https://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/ (last visited Apr. 5, 2020).
[14] Id.
[15] David Mosely & Daniel DeBehnke, M.D., Rural Hospital Sustainability: New Analysis Shows Worsening Situation for Rural Hospitals, Residents, Navigant (February 2019), https://guidehouse.com/-/media/www/site/insights/healthcare/2019/navigant-rural-hospital-analysis-22019.pdf.
[16] Id.