Single Payer Could Stop the Rural Hospital Closure Crisis

Single Payer Could Stop the Rural Hospital Closure Crisis

By Frances Gill for the People’s Policy Project. Photo: In 2015, Novant Health made the decision to close down Franklin Medical Center, in Louisburg. Photo credit: Taylor Sisk

America’s rural hospitals are closing down at an alarming rate. According to the North Carolina Rural Health Research Program, there were seventy-two rural hospital closures between 2010 and 2016, close to double the number that closed between 2005 and 2009. Hundreds more are teetering on the brink of closure.

Consequently, rural America faces a serious healthcare delivery challenge, which is made all the more urgent by the fact that rural residents tend to be much sicker to begin with. They have higher rates of chronic conditions and greater psychological distress. Rural counties have higher death rates from unintentional injuries, more motor vehicle injuries, greater premature mortality (below age 75), higher suicide rates amongst men, and higher infant mortality rates.

Health disparities between rural and urban America are profoundly well documented, and geographic access—the ease or difficulty of traveling to a healthcare provider—is one of the commonly offered explanations for this disparity, especially in the case of traumatic accidents or other medical emergencies. When these rural hospitals close, the distance between a person’s home and the nearest medical facility increases dramatically, and so too does the time it would take an ambulance to reach them in an emergency.


But when the Affordable Care Act became law, the rate of rural hospital closures increased dramatically. One reason for this is that the ACA began penalizing hospitals with high readmission rates, a metric that represents the number of patients who return to the hospital after discharge. This was intended to push hospitals towards providing higher quality care and is in line with an admirable trend in American healthcare towards value based payments. But it is also an aspect of the law that disproportionately impacts hospitals that see a higher proportion of sicker patients, as rural hospitals do.


Lawmakers have proposed several solutions to this problem, but they all fall short. Republican Senators Grassley and Gardner put forth the REACH Act—the Rural Emergency Acute Care Hospital Act—in 2015. Democratic Senator Klobuchar signed on this year when the bill was reintroduced. The bill would increase Medicare payments to specially designated Rural Emergency Hospitals. A similar bill was proposed in the House, but neither piece of legislation gained any traction. And even if either had, it would’ve been merely a stopgap.



Now compare this with the possibilities of a single payer healthcare system, where capital investment in healthcare is uncoupled from individual hospital operating budgets and individual hospital profitability and, instead, is driven by community need. In this system, whether or not a hospital’s operating costs remained under budget would not dictate the decision to buy a needed MRI machine or renovate the emergency room or even to keep the doors open. Instead, capital investments would be a product of conscientious regional planning that incorporates the voices and desires and health concerns of the community that the hospital serves.

The rural hospital closure crisis is driven by the supremacy of capital in our current healthcare delivery system. Only a system that dismantles the profit motive and prioritizes community well-being will truly deliver care to all who need it.


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