Trends in Risk of Financial Distress among Rural Hospitals
From January 2005 to July 2016, 118 rural hospitals have closed permanently, not including seven others that closed
and subsequently reopened. The number of closures has increased each year since 2010, and in the first half of 2016, the closure rate surpassed two closures per month. Hospital closures impact millions of rural residents in communities that are typically older, more dependent on public insurance programs, and in worse health than residents in urban communities. Identifying hospitals at high risk of closure and assessing the trends over time may inform strategies to prevent or mitigate the effects of closures.
In a previous Findings Brief the NC Rural Health Research Program described the Financial Distress Index (FDI) model, which assigns hospitals to high, mid-high, mid-low or low risk levels for 2016 using 2014 Medicare cost report and Neilsen-Claritas data summed to market areas. We also showed the probability of closure and reduction of services is significantly greater for rural hospitals at high risk of financial distress. Using data from 2011-2014, this brief, Trends in Risk of Financial Distress among Rural Hospitals, updates and describes the distribution and trends in the risk of financial distress among rural hospitals for the 2013-2016 period by state and census region.