Hospital closures affect people in rural and urban areas differently

A study from the Texas A&M University School of Public Health suggests that the closure of hospitals poses different challenges for commercially insured patients, depending on whether they live in rural or urban areas. However, rural patients face more issues related to care when a hospital closes.

This study is a result of a Moonshot partnership between the Texas A&M Rural and Community Health Institute and Blue Cross Blue Shield Texas, which provided a $10 million grant to explore innovative solutions to rural health care problems. This work is important because rural health care continues to be in a rapid transition. Since 2005, 24 of the state’s rural hospitals have closed, according to American Public Media Research Lab. Additionally, rural areas often face significant shortages in key health care professions. As of 2018, 35 Texas counties had no physician, 58 counties lacked a general surgeon, and 147 Texas counties had no obstetrician or gynecologist, according to data from the Rural and Community Health Institute and the Episcopal Health Foundation.

This latest study, entitled “Rural Hospital Closures: Effects on Utilization and Medical Spending Among Commercially Insured Individuals,” was conducted by Texas A&M’s Elena Andreyeva, PhD, Bita Kash, PhD, and Nancy Dickey, MD, and Blue Cross Blue Shield Texas’ Veronica Averhart Preston, PhD, and Lan Vu.

The researchers looked at the impact of hospital closures on commercially insured patients, which is a departure from other studies that have analyzed data from the Medicare population. They used data from adults between the ages of 19-64 who were commercially insured in Texas between 2014-2019, as well as the U.S. Department of Agriculture index definitions to identify rural and urban areas.

This analysis found that rural and urban hospital closures affect people differently.

“Rural closures lead to reductions in care utilization, but they don’t necessarily affect costs,” Andreyeva said. “In comparison, urban closures do not lead to changes in utilization, but they do make service provision more expensive. If you’re living in an urban area and one hospital closes, you can still get services at a different hospital, but it is likely that that hospital would be more expensive or out-of-network.”

This study also underscores the wider implications of hospital closures.

“We always think of hospital closures affecting poor, uninsured, lower-income populations as well as Medicare or Medicaid populations,” Andreyeva said. “What this study shows is that hospital closures affect even commercially insured populations, who we think of as having stable insurance and access to care because they have insurance through an employer.”

Additionally, the consequences of a rural hospital closure have significant ripple effects in the areas.

“The way our health care is structured, rural areas experience a lot of hospital closures. They have a lot more people who are uninsured or are on Medicare or Medicaid, which reimburse at lower rates than commercial plans,” Andreyeva said. “Rural areas already have a hard time attracting nurses and doctors. The closure of a hospital in a rural area may lead to outpatient facilities and clinics closing. If you don’t have an anchor hospital, you’re more likely to see an exodus of physicians who might have worked in a clinic or outpatient facility.”

The researchers do not see rural hospital closures slowing soon.

“The way that the health care system in the United States is structured right now, there is no reason for this trend of closure of rural hospitals to stop,” Andreyeva said. “There are fewer and fewer of them every year. Obviously, something must be done because it is not just affecting lower-income Medicaid or uninsured individuals, it affects individuals who we think of as having better means to access to health care.”

Ultimately, policymakers, community leaders and health care professionals will need to innovate to keep rural hospitals open.

“If rural areas want to retain the population and prevent out-migration, these hospitals need to remain in these communities,” Andreyeva said. “Rural hospitals close because they have more individuals who are underinsured or uninsured. It is already harder to retain physicians, so something must be done either to allow people to access means to visit hospitals in rural areas or to incentivize physicians to remain in the area, such as programs that forgive medical school debt for working a specific time in rural areas.”

– by Dorian Martin