Geographic Variation in the 2018 Profitability of Urban and Rural Hospitals

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Rural hospital closures remain a worrisome issue for policy makers and communities. Since 2005, 170 rural hospitals closed. The North Carolina Rural Health Research Program and Policy Analysis Center tracks these closures and studies potential predictors. Profitability (revenue greater than expenses) is not the only predictor, but it is one of the main predictors of hospital closure. Researchers and policy makers are trying to better understand what leads up to a closure and how to develop sustainable health care models for communities who lose their hospital services. These studies underscore some of the more recent challenges facing rural hospitals. Add these to the age-old challenges of lower volume, poorer and sicker patient populations, and it’s not hard to understand why some hospitals may be in trouble.

To help policy makers, researchers, and communities understand which hospitals are likely to be less profitable, the North Carolina Rural Health Research Program‘s brief, Geographic Variation in the 2018 Profitability of Urban and Rural Hospitals, describes the geographic variability in 2018 profitability of CAHs, Other Rural Hospitals (Medicare Dependent Hospitals, Sole Community Hospitals, and rural Prospective Payment System (PPS) hospitals denoted as “ORH”), and urban PPS hospitals by census region, census division, and state.

This study has five key findings: 1) Nationally, urban hospitals were more than twice as profitable as rural hospitals in 2018; 2) The least profitable hospitals were CAHs and ORHs in the South; 3) Nationally, the majority of unprofitable hospitals were rural hospitals; 4) Among census regions, the greatest number of unprofitable hospitals were ORHs in the South and CAHs in the Midwest, and; 5) There was substantial variation in hospital profitability across states.


Other briefs in this series include: