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More than 500 rural hospitals at risk for closure before pandemic hit

On January 22, Becker’s Hospital CFO Report published a state-by-state breakdown of the hundreds of rural hospitals that were at immediate or high risk of closing before the pandemic due to “financial losses and lack of reserves to maintain operations."

Stories of rural hospitals being forced to shutter their doors because of financial strain are unfortunately becoming more and more commonplace, but this latest data from the Center for Healthcare Quality and Payment Reform got us thinking for a few reasons.

Firstly, the data pre-dates the COVID-19 pandemic that we know dealt a further blow to hospital finances. The effects of increased costs to fight the pandemic coupled with drops in people seeking care likely pushed these rural hospitals—already navigating a precarious financial situation—further to the brink.

Yet while hospitals continue to put themselves on the line and show up for their local communities in the midst of the pandemic, we are witnessing payor behavior that falls in stark contrast. A recent example: after a year in which UnitedHealthcare and Anthem both reported record-breaking profits, United kicked off 2021 by forcing Montefiore, a critical safety-net hospital in New York City, and Envision Healthcare, a national physician group employing thousands of emergency room docs, to either accept dramatic rate cuts or be dropped from their network.

When insurers fail to pay hospitals and physicians fairly for the critical services they provide, it makes it nearly impossible for them to keep their doors open—and the incredible number of rural hospitals in dire financial straits is a testament to this. We think it’s time more people start calling insurers out for it.

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