By: April Simpson 

As the COVID-19 pandemic battered large, metropolitan areas this spring, rural hospitals prepared to be next on the frontlines.

But in order to ready their facilities for a potential surge in patients, those small hospitals had to forgo many of their most profitable operations. Months later, a few rural hospitals are fighting outbreaks. But others have empty beds, further threatening their viability in an era of shrinking health care options for people living in rural communities.

“If you were already in a very thin margin, and you lose a lot of your operating revenue because you’re making space and personnel available —  and then you’re not using them — it’s pretty powerful logic that you’re in big trouble,” said Keith Mueller, director of the RUPRI Center for Rural Health Policy Analysis at the University of Iowa.

Pandemic-related federal money has helped to struggle with rural hospitals to stay afloat. But as Congress considers additional aid this month, advocates and policymakers would like to move beyond stopgap measures to change the hospitals’ long-term trajectory.

“We’re due for reckoning in our rural hospital policy,” said Ge Bai, associate professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health in Baltimore.

As the pandemic persists, it’s unclear how long struggling rural hospitals can hang on.

Rural hospitals have long been fighting for their survival. Since 2010, 128 rural hospitals have closed, including a record 18 hospitals last year. Even more rural hospitals were on track to shut down this year until Congress in March approved $100 billion to health care providers in the CARES Act. The support included $10 billion in targeted funding that was allocated based on operating expenses before COVID-19.

Earlier this month, the U.S. Health and Human Services Department announced another $1 billion targeted to certain hospitals that serve rural populations.

The CARES Act support was intended to make hospitals whole because of lost revenue. It was not meant to bolster rural hospitals that already were in terrible shape, according to experts. Yet “as healthy patients delay care and cancel elective services, rural hospitals are struggling to keep their doors open,” the Health Department said in distributing the funding.

Additional federal help came in $75 billion from the Paycheck Protection Program, which provides forgivable loans used for payroll costs, $150 million in Small Rural Hospital Improvement grants to support COVID-19 activities and increased Medicare payments for treating COVID-19 patients.

At Bibb Medical Center in Centreville, Alabama, stations with personal protective equipment, known collectively as PPE, are set up outside isolation rooms, including a nine-bed COVID-19 unit. The center is functioning as a step-down facility for COVID-19 and other patients who aren’t well enough to return home but don’t need the level of care provided by a tertiary hospital. It’s fairly quiet given limits on visitation, said CEO Joseph Marchant.

“The continued challenge for the rural facilities is just understanding while there’s been some funding provided early on, we really feel like these challenges are going to go on for quite a while,” Marchant said. “We hope this support continues to help some of these facilities that are operating.”

A Slow Recovery

Hospital losses may far outweigh federal relief. The American Hospital Association estimates hospitals and health systems lost $202.6 billion between March and June and are projected to lose an additional $120.5 billion through the end of 2020. The slow recovery of inpatient and outpatient volumes adds to the strain.

The association’s findings are based on an electronic survey representing 1,360 member hospitals across 48 states and Washington, D.C. Rural hospitals and health care systems represented about one-third of respondents.

When you add COVID, there’s no question that the targeted rural funding with the other CARES Act funding has helped, but we’ve not covered at this point the cost of lost revenue, nor the expenses associated with COVID,” said Dr. Donald Williamson, president and CEO of the Alabama Hospital Association.

Rural hospitals are buying N95 masks, gowns and other PPE that are being used with all patients regardless of COVID-19 status. The additional costs cut further into their already thin margins. Before the pandemic, 47% of rural providers operated in the red.

So far this year, 12 rural hospitals have closed across the country, including four in April before they could benefit from federal support.

Texas leads the country in rural hospital closures. Roughly half of the state’s rural hospitals are considered vulnerable, according to the Chartis Group, a healthcare analytics firm. Prior to the federal relief, John Henderson, president and CEO of the Texas Organization of Rural and Community Hospitals (TORCH), worried that the pandemic would force anywhere from six to 12 rural Texas hospitals to shutter this year.

“No doubt when this thing’s over, if we don’t reimagine the way we take care of people and the way we fund services, rural hospitals will still have challenges,” Henderson said.

Trying Times

To prepare for a surge in COVID-19 patients, many states required that hospitals suspend or reduce elective surgeries, such as profitable knee or hip replacements, or postpone or divert patients to a different clinical environment.

“All hospitals suffered when they responded immediately to the request to try to flatten the curve of the pandemic by essentially shutting down every way you make money,” said Peggy Wheeler, vice president of rural health and governance at the California Hospital Association.

Outpatient care accounts for 50-70% of rural hospitals’ income, said Maggie Elehwany, government affairs and policy vice president at the National Rural Health Association. Some hospitals in rural and smaller metropolitan areas have furloughed employees to maintain financial stability.

Williamson in Alabama is bracing for the possibility hospitals will once again reduce elective procedures as new cases rise.