2018-23 Profitability of Rural Hospitals by with and without Rural Health Clinics and Long-Term Care
Access to care in many communities has been reduced by rural hospital closures. The causes of rural hospital closures are complex and multifaceted, but unprofitability has been identified as a major contributor. In this study, the NC Rural Health Research Program focuses on whether hospitals operate rural health clinics (RHCs) or provide long-term care. Using hospital cost report data from the Centers for Medicare & Medicaid Services (CMS), we compared total margin for hospitals with RHCs (yes/no) and long-term care (yes/no)) for the years 2018-2023. This period includes COVID-19 – years where hospitals received Public Health Emergency (PHE) funding. Timing differences in hospital recognition of PHE revenue versus PHE expenses on Medicare cost reports could distort reported profitability in 2020 and 2021. For this reason, in this study we considered it important to clearly separate study years without PHE funds (before COVID-19 years) and study years with PHE funds (after COVID-19 years). Therefore, we looked at profitability over a five-year period consisting of two years before and three years after COVID-19. Taking into account the Public Health Emergency funds received during the pandemic, we found:
- Rural hospitals that did not provide long-term care had a higher median total margin than those that provided long-term care in every period except 2018-19. Median profitability of rural hospitals that provided and did not provide long-term care increased over the first four time periods, but there was a large decrease in profitability of both in 2022-23.
- Rural hospitals that did not operate rural health clinics had a higher median total margin than those that operated rural health clinics in the first three periods, but a lower total margin in the last two periods. Median profitability of rural hospitals that operated and did not operate rural health clinics increased over the four periods, but there was a large decrease in profitability of both in 2022-23.
- Profitability of rural hospitals in 2020-21 and 2021-22 was influenced by Public Health Emergency funding distributed during the COVID-19 pandemic.
To read the brief, download: 2018-23 Profitability of Rural Hospitals by with and without Rural Health Clinics and Long-Term Care