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| vol 16, num 3 | August, 2019 |
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| The Criticality of Critical-Access Hospitals |
| Critical-access hospitals (CAHs) are paramount in delivering health care to rural communities. A recent article by the Washington Post highlighted the importance of CAHs to their communities by describing a small sign outside the doors of Fairfax Community Hospital (a CAH in Northern Oklahoma) that read, “A small community is only as healthy as its hospital.”
Generally, critical-access hospitals have 25 or fewer beds, are located more than 35 miles from another hospital, maintain an annual average length of stay of 96 hours or less, and provide 24/7 emergency care services. As of January 2019, there were 1,349 CAHs located throughout the United States. According to a study published by iVantage Analytics in 2016, 673 of these hospitals were at risk of closing. Another study by the Sheps Center at the University of North Carolina found that from January 2010 through May 2019, 104 rural hospitals had closed their doors, including 37 CAHs.
From 2011 through 2018, an average of four CAHs closed per year. In 2019, five CAHs have already closed. This trend is driven by a number of challenges that face CAHs today, as detailed below.
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| Modern Challenges for the Survival of Rural Hospitals |
| It is no secret that health care providers operate in a heavily regulated industry that can be unforgiving, even for providers that comply with all of the complex regulations. Rural hospitals in particular are facing increased financial distress due to a number of factors that are outside of their control, and the market has seen a significant uptick in rural hospital closures and bankruptcies in the past couple of years. Due to the continued building of financial pressure on these providers, the trend is unlikely to change in the foreseeable future.
Compulsory Business Model
Congress passed the Hospital Survey and Construction Act (also known as the Hill-Burton Act) in 1946 in the aftermath of World War II, which provided construction grants and loans that helped build many rural hospitals. In exchange, the hospitals were obligated to provide a reasonable volume of services for free or at reduced costs for patients who were unable to pay. The program stopped providing funding in 1997, but the hospitals’ obligations to continue providing services for free or at a reduced cost continues in perpetuity. Combined with the Emergency Medical Treatment and Active Labor Act (EMTALA), which requires all hospitals to provide services to patients who need emergency medical treatment, regardless of whether the patients have insurance, the framework is laid for a business model that is set up for failure in lower income areas, many of which are rural.
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| A Look at Challenges to Rural Hospitals, with an Eye Toward Tennessee |
There are 95 counties in Tennessee and 147 licensed hospitals with 23,280 beds. Seventy-four of the 95 counties, including some of those with the smallest populations, have at least one hospital. Grouping the county populations into categories, with the number of hospitals in each, yields the following:
| Number of Counties |
Population Bracket
(County Populations Range from 936,961 Down to 5,073) |
Number of Hospitals |
| 2 |
Over 500,000 |
32 |
| 5 |
200,000 - 500,000 |
27 |
| 6 |
100,000 - 200,000 |
19 |
| 5 |
75,000 - 100,000 |
8 |
| 13 |
50,000 - 75,000 |
16 |
| 64 |
5,000 - 50,000 |
46 |
| Total: 95 |
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Total: 147 |
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