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February 11, 2020
Understanding the Rural Hospital
Closure Crisis and Its Consequences
January 2020 Page 2
Rural Hospitals Serve Older, Poorer, and Sicker
Populations with Less Access to Care
Sources: CMS Service Area File 2015, Robert Wood Johnson Foundation/University Wisconsin Population Health Institute 2016 County Health Rankings and National Center for Veterans Analysis and Statistics 2016.
January 2020 Page 3
Convergence of Multiple Pressure Points
Local and national pressure points creating downward pressure on rural providers.
Healthcare Policies
Population Migration
Health Disparities
Recruitment/Retention
Economic Policy
January 2020 Page 4
Sustained Pressure on Margins
Source:S&P Global Market Intelligence, Not for Profit Healthcare Sector Outlook, Jan 2017; Moody’s, Not-for-Profit Healthcare and Public Hospitals, May 2017; Becker Hospital Review, 50 Things to Know About the Hospital Industry, Jan 2017
“United States
nonprofit hospitals see decrease in median operating margins”
“Growing concern of weaker operating performance due to declines in utilization and payor mix”
Evidence of sustained reimbursement pressure coupled with rising operating costs culminate in slim
and shrinking operating margins.
“Between 2015 and 2020, the number of rural hospitals in the red rose from 39% to 47%.
January 2020 Page 5
In 2015, 39% of all Rural Providers had a
Negative Operating Margin
AK
CA
HI
ME
MA
RI
NH
CT
NJ
DC
NY
OH
VT
PA
DE
MI
MD
NC
SC
WI
FL
GA
VA
WV
INIL
KY
TN
ALMSLATX
AZ AROKNM
NV UT CO KS MO
SDWA
OR
NDMT
ID
MN
IAWY NE
State-level percentage of rural hospitals with negative operating margin.
0-20% 21%-40% 41%-60% 61%-80% 81%-100%Source: The Chartis Center for Rural Health, 2019.
NA
January 2020 Page 6
Today 47% of all Rural Providers have a
Negative Operating Margin
AK
CA
HI
ME
MA
RI
NH
CT
NJ
DC
NY
OH
VT
PA
DE
MI
MD
NC
SC
WI
FL
GA
VA
WV
INIL
KY
TN
ALMSLATX
AZ AROKNM
NV UT CO KS MO
SDWA
OR
NDMT
ID
MN
IAWY NE
State-level percentage of rural hospitals with negative operating margin.
0-20 21-40 41-60 61-80 81-100Source: The Chartis Center for Rural Health, 2019.
NA
January 2020 Page 7
Hospital Operating Margins:
Medicaid Expansion and Non-Expansion States
Current: Sequestration, Bad Debt
Expansion State Non-Expansion State
0.8% -0.3%
44% 52%
Median Operating Margin
% with Negative Operating Margin
January 2020 Page 8
The Rural Hospital Closure Crisis
January 2020 Page 9
Hospital Closures – January 1, 2015 (47)
AK
CA
HI
ME
MA
RI
NH
CT
NJ
DC
NY
OH
VT
PA
DE
MI
MD
NC
SC
WI
FL
GA
VA
WV
INIL
KY
TN
ALMSLATX
AZ AROKNM
NV UT CO KS MO
SDWA
OR
NDMT
ID
MN
IAWY NE
Source: Sheps Center, UNC
Number of rural hospitals closed since 2010.
1-2 3 4 5-8 10+0
January 2020 Page 10
Hospital Closures – January 1, 2020 (120 and counting)
AK
CA
HI
ME
MA
RI
NH
CT
NJ
DC
NY
OH
VT
PA
DE
MI
MD
NC
SC
WI
FL
GA
VA
WV
INIL
KY
TN
ALMSLATX
AZ AROKNM
NV UT CO KS MO
SDWA
OR
NDMT
ID
MN
IAWY NE
Source: Sheps Center, UNC
Number of rural hospitals closed since 2010.
1-2 3 4 5-8 10+0
January 2020 Page 11
Rural Closures and Impact on Access to Care
Residents of 68 communities must
now drive 30 minutes more to
reach the nearest hospital.*
Based on 113 rural hospital closures, November 2019.
January 2020 Page 12
Offsetting Revenue Pressure:
The Decline of Access to OB Services in Rural America
Rural hospitals
dropping OB since 2011:
Rural hospitals offering
OB that have closed:
134
21
155Rural communities that have
lost access to OB since 2011.
© 2018 The Chartis Group, LLC. All Rights Reserved. August 2019 Page 13
Understanding Rural Hospital
Vulnerability
January 2020 Page 14
The Tipping Point Emerges at 12 Months Prior to Closure
January 2020 Page 15
Vulnerable
AK
CA
HI
ME
MA
RI
NH
CT
NJ
DC
NY
OH
VT
PA
DE
MI
MD
NC
SC
WI
FL
GA
VA
WV
INIL
KY
TN
ALMSLATX
AZ AROKNM
NV UT CO KS MO
SDWA
OR
NDMT
ID
MN
IAWY NE
Percentage of State Rural Hospitals Determined to be Vulnerable
1%-9% 10%-15% 16%-20% 21%-25%0 26%-30% 31%-40% 40%+
January 2020 Page 16
The ‘Most Vulnerable’
AK
CA
HI
ME
MA
RI
NH
CT
NJ
DC
NY
OH
VT
PA
DE
MI
MD
NC
SC
WI
FL
GA
VA
WV
INIL
KY
TN
ALMSLATX
AZ AROKNM
NV UT CO KS MO
SDWA
OR
NDMT
ID
MN
IAWY NE
1%-9% 10%-15% 16%-20% 21%-25%0
Percentage of State Rural Hospitals Determined to be Vulnerable/‘Most Vulnerable’
26+%
January 2020 Page 17
‘At Risk’
AK
CA
HI
ME
MA
RI
NH
CT
NJ
DC
NY
OH
VT
PA
DE
MI
MD
NC
SC
WI
FL
GA
VA
WV
INIL
KY
TN
ALMSLATX
AZ AROKNM
NV UT CO KS MO
SDWA
OR
NDMT
ID
MN
IAWY NE
1%-9% 10%-15% 16%-20% 21%-25%0
Percentage of State Rural Hospitals Determined to be Vulnerable/‘Most Vulnerable’/’At Risk’
26+%
January 2020 Page 18
9 Factors Impacting Sustainability
⚫ Average Age of Plant
⚫ Case Mix Index
⚫ Government Control Status
⚫ % Capital Efficiency
⚫ % Occupancy
⚫ % Outpatient Revenue
⚫ % Change Total Revenue
⚫ Medicaid Expansion Status
⚫ System Affiliation
January 2020 Page 19
Vulnerability (State Spotlight)
Texas
% Vulnerable
51% 24%27%
% At Risk % Most Vulnerable
Medicaid Expansion: NO
152 20 77 .2% 48%
Median
Op MarginClosed
Hospitals
# Vulnerable
Hospitals
% Negative
Op Margin# Rural
Hospitals
© 2018 The Chartis Group, LLC. All Rights Reserved. August 2019 Page 20
Measuring Rural Hospital Performance
January 2020 Page 21
ID
2020 Top 100 Critical Access Hospitals
11, 12
8/9
6/7
1/2
3/4
MT
MA
NM
NH
OR
TX
WA
WI
MI
IA
MNND
NE
SD
KS
CO
UT
13,14
January 2020 Page 22
Top 100 Critical Access HospitalsRIO GRANDE HOSPITAL DEL NORTE CO
PROWERS MEDICAL CENTER LAMAR CO
EAST MORGAN COUNTY HOSPITAL BRUSH CO
HEART OF THE ROCKIES REGIONAL MEDICAL CENTER SALIDA CO
LORING HOSPITAL SAC CITY IA
GUTHRIE COUNTY HOSPITAL GUTHRIE CENTER IA
KOSSUTH REGIONAL HEALTH CENTER ALGONA IA
FLOYD VALLEY HEALTHCARE LE MARS IA
CHI HEALTH MISSOURI VALLEY MISSOURI VALLEY IA
CASS COUNTY MEMORIAL HOSPITAL ATLANTIC IA
KNOXVILLE HOSPITAL & CLINICS KNOXVILLE IA
GREATER REGIONAL MEDICAL CENTER CRESTON IA
JONES REGIONAL MEDICAL CENTER ANAMOSA IA
ORANGE CITY AREA HEALTH SYSTEM ORANGE CITY IA
MYRTUE MEDICAL CENTER HARLAN IA
AVERA MERRILL PIONEER HOSPITAL ROCK RAPIDS IA
MERCYONE CENTERVILLE MEDICAL CENTER CENTERVILLE IA
DECATUR COUNTY HOSPITAL LEON IA
SHOSHONE MEDICAL CENTER KELLOGG ID
FRANKLIN COUNTY MEDICAL CENTER PRESTON ID
GOVE COUNTY MEDICAL CENTER QUINTER KS
SABETHA COMMUNITY HOSPITAL SABETHA KS
OSBORNE COUNTY MEMORIAL HOSPITAL OSBORNE KS
CLAY COUNTY MEDICAL CENTER CLAY CENTER KS
KINGMAN COMMUNITY HOSPITAL KINGMAN KS
SMITH COUNTY MEMORIAL HOSPITAL SMITH CENTER KS
ST LUKE HOSPITAL & LIVING CENTER MARION KS
NEMAHA VALLEY COMMUNITY HOSPITAL SENECA KS
GRAHAM COUNTY HOSPITAL HILL CITY KS
COMMUNITY MEMORIAL HEALTHCARE MARYSVILLE KS
ASHLAND HEALTH CENTER ASHLAND KS
PHILLIPS COUNTY HEALTH SYSTEMS PHILLIPSBURG KS
TREGO COUNTY LEMKE MEMORIAL HOSPITAL WA KEENEY KS
FAIRVIEW HOSPITAL GREAT BARRINGTON MA
BELL HOSPITAL ISHPEMING MI
MAYO CLINIC HEALTH SYSTEM - ST JAMES ST JAMES MN
MAYO CLINIC HEALTH SYSTEM-WASECA WASECA MN
SANFORD MEDICAL CENTER WHEATON WHEATON MN
RIVERWOOD HEALTHCARE CENTER AITKIN MN
PIPESTONE COUNTY MEDICAL CENTER PIPESTONE MN
NEW ULM MEDICAL CENTER NEW ULM MN
LIFECARE MEDICAL CENTER ROSEAU MN
SANFORD LUVERNE MEDICAL CENTER LUVERNE MN
COMMUNITY HOSPITAL OF ANACONDA ANACONDA MT
NORTH VALLEY HOSPITAL WHITEFISH MT
FALLON MEDICAL COMPLEX HOSPITAL BAKER MT
BEARTOOTH BILLINGS CLINIC RED LODGE MT
BARRETT HOSPITAL & HEALTHCARE DILLON MT
CENTRAL MONTANA MEDICAL CENTER LEWISTOWN MT
TRANSYLVANIA REGIONAL HOSPITAL BREVARD NC
CARRINGTON HEALTH CENTER CARRINGTON ND
SANFORD MEDICAL CENTER MAYVILLE MAYVILLE ND
JAMESTOWN REGIONAL MEDICAL CENTER JAMESTOWN ND
CHI LISBON HEALTH LISBON ND
CHI ST ALEXIUS HEALTH DEVILS LAKE DEVILS LAKE ND
TOWNER COUNTY MEDICAL CENTER CANDO ND
WEST RIVER REGIONAL MEDICAL CENTER HETTINGER ND
WISHEK COMMUNITY HOSPITAL WISHEK ND
ST ANDREWS HEALTH CENTER BOTTINEAU ND
LINTON HOSPITAL LINTON ND
FIRST CARE HEALTH CENTER PARK RIVER ND
JACOBSON MEMORIAL HOSPITAL CARE CENTER ELGIN ND
HOWARD COUNTY MEDICAL CENTER ST PAUL NE
BRODSTONE MEMORIAL HOSPITAL SUPERIOR NE
BOONE COUNTY HEALTH CENTER ALBION NE
NEMAHA COUNTY HOSPITAL AUBURN NE
JEFFERSON COMMUNITY HEALTH & LIFE FAIRBURY NE
PENDER COMMUNITY HOSPITAL PENDER NE
MERRICK MEDICAL CENTER CENTRAL CITY NE
MEMORIAL HEALTH CARE SYSTEMS SEWARD NE
PROVIDENCE MEDICAL CENTER WAYNE NE
YORK GENERAL HOSPITAL YORK NE
PHELPS MEMORIAL HEALTH CENTER HOLDREGE NE
MEMORIAL HOSPITAL AURORA NE
COMMUNITY MEDICAL CENTER FALLS CITY NE
ANDROSCOGGIN VALLEY HOSPITAL BERLIN NH
MINERS' COLFAX MEDICAL CENTER RATON NM
WALLOWA MEMORIAL HOSPITAL ENTERPRISE OR
SAINT ALPHONSUS MEDICAL CENTER BAKER CITY OR
AVERA HAND COUNTY MEMORIAL HOSPITAL AND CLINIC MILLER SD
MILBANK AREA HOSPITAL/AVERA HEALTH MILBANK SD
HANS P PETERSON MEMORIAL HOSPITAL PHILIP SD
SANFORD HOSPITAL WEBSTER WEBSTER SD
MITCHELL COUNTY HOSPITAL DISTRICT COLORADO CITY TX
COLLINGSWORTH GENERAL HOSPITAL WELLINGTON TX
KANE COUNTY HOSPITAL KANAB UT
SANPETE VALLEY HOSPITAL MOUNT PLEASANT UT
GUNNISON VALLEY HOSPITAL GUNNISON UT
WHITMAN HOSPITAL AND MEDICAL CENTER COLFAX WA
UPLAND HILLS HEALTH DODGEVILLE WI
THEDACARE MEDICAL CENTER WAUPACA WI
MAYO CLINIC HEALTH SYSTEM-RED CEDAR MENOMONIE WI
WESTFIELDS HOSPITAL AND CLINIC NEW RICHMOND WI
ASCENSION EAGLE RIVER HOSPITAL EAGLE RIVER WI
ASPIRUS LANGLADE HOSPITAL ANTIGO WI
MAYO CLINIC HEALTH SYSTEM-NORTHLAND BARRON WI
THEDACARE MEDICAL CENTER SHAWANO WI
ASCENSION CALUMET HOSPITAL CHILTON WI
MEMORIAL MEDICAL CENTER ASHLAND WI
RIVER FALLS AREA HOSPITAL RIVER FALLS WI
January 2020 Page 23
2020 Top 100 Rural & Community Hospitals
7/8
6
5
4
1/2
3
AR
CO
SD
IN
MN
9
FL
IL
KY
LA
MD
ME
IA
MO
MS
MT
NE
KS
NM
NY
OH
OR
OK
PA
TX
UT
VT
VA
WA
WI
MI
WV
WY
January 2020 Page 24
Top 100 Rural & Community HospitalsWHITE RIVER MEDICAL CENTER BATESVILLE AR
MERCY REGIONAL MEDICAL CENTER DURANGO CO
MONTROSE MEMORIAL HOSPITAL MONTROSE CO
UCHEALTH YAMPA VALLEY MEDICAL CENTER STEAMBOAT SPRINGS CO
STERLING REGIONAL MEDCENTER STERLING CO
VAIL HEALTH HOSPITAL VAIL CO
BAPTIST MEDICAL CENTER - NASSAU FERNANDINA BEACH FL
LAKES REGIONAL HEALTHCARE SPIRIT LAKE IA
SPENCER MUNICIPAL HOSPITAL SPENCER IA
ST ANTHONY REGIONAL HOSPITAL & NURSING HOME CARROLL IA
ST ANTHONYS MEMORIAL HOSPITAL EFFINGHAM IL
ST JOSEPHS HOSPITAL BREESE IL
JERSEY COMMUNITY HOSPITAL JERSEYVILLE IL
MEMORIAL HOSPITAL AND HEALTH CARE CENTER JASPER IN
MAJOR HOSPITAL SHELBYVILLE IN
SCHNECK MEDICAL CENTER SEYMOUR IN
PARKVIEW HUNTINGTON HOSPITAL HUNTINGTON IN
KING'S DAUGHTERS' HEALTH MADISON IN
PARKVIEW NOBLE HOSPITAL KENDALLVILLE IN
MARION GENERAL HOSPITAL MARION IN
PRATT REGIONAL MEDICAL CENTER PRATT KS
ADVENTHEALTH OTTAWA OTTAWA KS
NEWTON MEDICAL CENTER NEWTON KS
HAYS MEDICAL CENTER HAYS KS
HARRISON MEMORIAL HOSPITAL CYNTHIANA KY
CLARK REGIONAL MEDICAL CENTER WINCHESTER KY
MERCY REGIONAL MEDICAL CENTER VILLE PLATTE LA
UMD SHORE MEDICAL CENTER AT EASTON EASTON MD
GARRETT COUNTY MEMORIAL HOSPITAL OAKLAND MD
ATLANTIC GENERAL HOSPITAL BERLIN MD
UMD SHORE MEDICAL CTR AT CHESTERTOWN CHESTERTOWN MD
NORTHERN MAINE MEDICAL CENTER FORT KENT ME
MUNSON HEALTHCARE CADILLAC HOSPITAL CADILLAC MI
ASCENSION ST JOSEPH HOSPITAL TAWAS CITY MI
MUNSON HEALTHCARE MANISTEE HOSPITAL MANISTEE MI
DICKINSON COUNTY MEMORIAL HOSPITAL IRON MOUNTAIN MI
ALOMERE HEALTH ALEXANDRIA MN
OWATONNA HOSPITAL OWATONNA MN
ESSENTIA HEALTH ST JOSEPH'S MEDICAL CENTER BRAINERD MN
WINONA HEALTH SERVICES WINONA MN
LAKE REGION HEALTHCARE CORPORATION FERGUS FALLS MN
HUTCHINSON HEALTH HUTCHINSON MN
CARRIS HEALTH LLC WILLMAR MN
MAYO CLINIC HEALTH SYSTEM - FAIRMONT FAIRMONT MN
MAYO CLINIC HEALTH SYSTEM - RED WING RED WING MN
MERCY HOSPITAL WASHINGTON WASHINGTON MO
BAPTIST MEMORIAL HOSPITAL UNION COUNTY NEW ALBANY MS
BOZEMAN HEALTH DEACONESS HOSPITAL BOZEMAN MT
ST PETERS HOSPITAL HELENA MT
KALISPELL REGIONAL MEDICAL CENTER KALISPELL MT
COLUMBUS COMMUNITY HOSPITAL COLUMBUS NE
GUADALUPE COUNTY HOSPITAL SANTA ROSA NM
ST JAMES MERCY HOSPITAL HORNELL NY
COMMUNITY HOSPITALS AND WELLNESS CENTERS BRYAN OH
STILLWATER MEDICAL CENTER STILLWATER OK
JANE PHILLIPS MEMORIAL MEDICAL CENTER BARTLESVILLE OK
SSM HEALTH ST ANTHONY HOSPITAL - SHAWNEE SHAWNEE OK
WILLAMETTE VALLEY MEDICAL CENTER MCMINNVILLE OR
MERCY MEDICAL CENTER ROSEBURG OR
SKY LAKES MEDICAL CENTER KLAMATH FALLS OR
UPMC SOMERSET SOMERSET PA
PENN HIGHLANDS HUNTINDON HUNTINGDON PA
PUNXSUTAWNEY AREA HOSPITAL PUNXSUTAWNEY PA
GEISINGER-LEWISTOWN HOSPITAL LEWISTOWN PA
PRAIRIE LAKES HOSPITAL WATERTOWN SD
BROOKINGS HEALTH SYSTEM BROOKINGS SD
AVERA ST MARY'S HOSPITAL PIERRE SD
AVERA SACRED HEART HOSPITAL YANKTON SD
AVERA ST LUKES ABERDEEN SD
AVERA QUEEN OF PEACE MITCHELL SD
PETERSON REGIONAL MEDICAL CENTER KERRVILLE TX
KNOX COUNTY HOSPITAL KNOX CITY TX
COLUMBUS COMMUNITY HOSPITAL COLUMBUS TX
HILL COUNTRY MEMORIAL HOSPITAL FREDERICKSBURG TX
CHILDRESS REGIONAL MEDICAL CENTER CHILDRESS TX
STEPHENS MEMORIAL HOSPITAL BRECKENRIDGE TX
CEDAR CITY HOSPITAL CEDAR CITY UT
CASTLEVIEW HOSPITAL PRICE UT
SEVIER VALLEY HOSPITAL RICHFIELD UT
ASHLEY REGIONAL MEDICAL CENTER VERNAL UT
UINTAH BASIN MEDICAL CENTER ROOSEVELT UT
RIVERSIDE SHORE MEMORIAL HOSPITAL ONANCOCK VA
CENTRAL VERMONT MEDICAL CENTER BARRE VT
SOUTHWESTERN VERMONT MEDICAL CENTER BENNINGTON VT
NORTHWESTERN MEDICAL CENTER SAINT ALBANS VT
OLYMPIC MEDICAL CENTER PORT ANGELES WA
ISLAND HOSPITAL ANACORTES WA
AURORA MEDICAL CTR MANITOWOC COUNTY TWO RIVERS WI
ASCENSION ST MICHAELS HOSPITAL STEVENS POINT WI
SSM HEALTH ST CLARE HOSPITAL - BARABOO BARABOO WI
THE MONROE CLINIC MONROE WI
WATERTOWN REGIONAL MEDICAL CENTER WATERTOWN WI
SAUK PRAIRIE HOSPITAL PRAIRIE DU SAC WI
FORT MEMORIAL HOSPITAL FORT ATKINSON WI
GREENBRIER VALLEY MEDICAL CENTER RONCEVERTE WV
IVINSON MEMORIAL HOSPITAL LARAMIE WY
SAGEWEST HEALTH CARE RIVERTON WY
EVANSTON REGIONAL HOSPITAL EVANSTON WY
SHERIDAN MEMORIAL HOSPITAL SHERIDAN WY
ST JOHNS MEDICAL CENTER JACKSON WY
January 2020 Page 25
How the 2020 Top 100 CAHs Measure Up to Rural Peers
0
10
20
30
40
50
60
70
80
90
Inpatient
Market
Share
Outpatient
Market
Share
Quality Outcomes Patient
Perspective
Cost Charge Financial
Stability
Top 100 CAH Median
IND
EX
Perc
en
tile
2020 All CAH Median
January 2020 Page 26
2020 State Median Performance (CAHs – Top 3)
Inpatient
Market Share
Outpatient
Market ShareQuality Outcomes
AK
WY
VT
NM
IA
WA
NE
ND
KS
NE
WY
CO
Patient
PerspectiveCost Charge Finance
LA
UT
WI
LA
NV
AK
MA
TN
NY
ND
MA
NY
January 2020 Page 27
Top 100 by the Numbers
352CAHs recognized
since 201111
10
9X Winners
8X Winners
7X Winners
8
205RPPS recognized
since 2016
27
5X Winners
4X Winners
25
States with Most Top 100 CAHs (2011-2020) States with Most Top 100 RPPS (2016-2020)
IA NEWI WI MI(41) (27)(28) (14)(14)
PA MN(12)(12)
© 2018 The Chartis Group, LLC. All Rights Reserved. August 2019 Page 28
Michael Topchik
National Leader, The Chartis Center for Rural Health
Thank You For Your Time and Attention