Geographic Variation in Risk of Financial Distress among Rural Hospitals

OVERVIEW

From 2005 to 2015, 112 rural hospital closures have been identified (North Carolina Rural Health Research Program, 2015)1 . Although six of these closed hospitals have since reopened, the remaining closures impact millions of rural residents in communities that are typically older and poorer, more dependent on public insurance programs, and in worse health than residents in urban communities.2,3,4 The Financial Distress Index (FDI) model (see NC Rural Health Research Program Findings Brief “Prediction of Financial Distress among Rural Hospitals”) assigns hospitals to high, mid-high, mid-low or low risk levels (in two years) using current hospital financial performance, government reimbursement, organizational characteristics and market characteristics.5 Using 2013 FDI risk levels, this brief describes the geographic variation in the proportion of rural hospitals forecasted to be at high risk of distress in 2015.

RESULTS

Figure 1 shows that the states with the largest number of rural hospitals at high risk of financial distress are Texas (17), Oklahoma (17), Tennessee (14), Arkansas (13), Georgia (13), Alabama (13), and Kentucky (10). The States with the largest percentage of rural hospitals at high risk are Hawaii (42%), Oklahoma (24 %), Arkansas (27%), Tennessee (23%), and Alabama (30 %). Nineteen states have no rural hospitals at high risk of financial distress.