To What Extent do Community Characteristics Explain Differences in Closure among Financially Distressed Rural Hospitals?

Abstract

From January 2005 through December 2015, 105 rural hospitals closed. This study examined associations between community characteristics and rural hospital closure. Compared with other rural hospitals that were at high risk of financial distress but remained open over the same time period, closed rural hospitals had a smaller market share (p < .0001) despite being in areas with higher population density (p < .05), were located nearer to another hospital (p < .0001), and were located in markets that had a higher rate of unemployment (p < .05) and a higher percentage of Black (p < .05) and Hispanic (p < .01) residents. These results have three implications for rural health policy: rural hospital closures may disproportionately affect racial and ethnic minorities, community characteristics in combination with other factors make it likely that rural hospital closures will continue, and rural hospital closures illuminate the need for new models of reimbursement and health care delivery to meet the needs of rural communities.