In 2016, the NC Rural Health Research Program developed and utilized the Financial Distress Index (FDI) model to identify hospitals at high risk of financial distress and assess trends in varying risk of financial distress over time to help inform strategies to prevent or mitigate the effects of closures. As part of that study, we examined geographic variation in financial distress risk level. We found that the South census region had the largest percentage of rural hospitals predicted to be at high and mid-high risk of financial distress. The purpose of this brief, Geographic Variation in the 2019 Risk of Financial Distress among Rural Hospitals, is to use updated results from the FDI to describe the geographic variation in risk of financial distress among rural hospitals in 2019.
The FDI model assigns rural hospitals to high, mid-high, mid-low or low risk levels for a given year using Medicare cost report and Neilsen-Claritas data summed to market areas from two previous years. Using data from 2017, this brief, Geographic Variation in the 2019 Risk of Financial Distress among Rural Hospitals, updates and describes the regional disparities in the risk of financial distress among rural hospitals in 2019.
More than 20% of rural hospitals are predicted to be at high risk or mid-high risk of financial distress in 2019. The proportion of hospitals at high risk of financial distress varies greatly by state, with the highest rates observed in Alabama, Georgia, Oklahoma, Texas, Kansas, Mississippi, and Tennessee. Similar to results seen in 2016, with the exception of Hawaii. The risk distribution also varies by census region with the South having the largest percentage of rural hospitals at both high and mid-high risk of financial distress.