Most rural hospital closures are in states that refuse to expand Medicaid

In late January, Pinnacle Regional Hospital in Boonville, Missouri, became the first rural hospital in the country to shut down in 2020. However, it was the 121st rural hospital to shut down since 2010, the year the Affordable Care Act was signed into law.

More than 7 in 10 of the rural hospitals that shut down in that time period — 87 — were located in just 14 states that did not expand Medicaid, according to an analysis of data from the University of North Carolina’s Sheps Center for Health Services Research.

Under the ACA, states had the option of expanding Medicaid to cover tens or hundreds of thousands of residents, with the federal government picking up almost all of the financial cost. Since that time, all but 15 states have implemented a Medicaid expansion program, according to the Kaiser Family Foundation.

Those 15 states are Alabama, Florida, Georgia, Kansas, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming.

Republicans control the legislative branch, executive branch, or both, in all 15 states.

“If you look at the states, put them in buckets, and look at where rural hospitals closures are happening, there are more happening in states that did not expand [Medicaid],” Mark Holmes, a professor of health policy and management and the director of UNC’s Rural Health Research Program, said in a phone interview this week.

Holmes said that the most visible work on the topic comes from a 2018 journal article in Health Affairs. That research concluded Medicaid expansion in a state “was associated with improved hospital financial performance and substantially lower likelihoods of closure, especially in rural markets and counties with large numbers of uninsured adults before Medicaid expansion.”

Brock Slabach, executive vice president of the National Rural Hospital Association, cited different research showing a similar relationship between rural hospital closures and Medicaid expansion.

“Being located in a state that expanded Medicaid decreased the likelihood of closure by 62.3%,” Slabach said in a phone interview, referring to a study from Chartis Center for Rural Research. Further, Slabach said that of the 216 rural hospitals around the country most at risk of closing, 75% are located in states that did not expand Medicaid.

Texas leads the country in rural hospital closures since 2010 with 20. Tennessee has seen 13 rural hospitals shut down, one of a total nine non-expansion states seeing five or more rural hospitals close. Wyoming is the only non-expansion state that had no rural hospital closures.

In Alabama, six rural hospitals have closed since 2010.

“Alabama’s current, bare-bones Medicaid program means too many fall into the coverage gap,” Rep. Terri Sewell (D-AL), a lead proponent of Medicaid expansion, said in an email.

Expanding Medicaid “could generate $2.7 billion in annual economic activity and create thousands of jobs, in addition to helping shore up our rural hospitals where every dollar counts,” Sewell added. “Expansion, which would increase the number of patients with health insurance to cover the cost of care, is essential to both delivering the services Alabamians need and keeping our rural hospitals open.”

The refusal to expand Medicaid could also have life or death consequences. A 2019 report from the Center on Budget and Policy Priorities found 15,600 adults died prematurely because states decided not to expand Medicaid.

Holmes emphasized the broader economic harm to a community when a rural hospital shuts down. In addition to hundreds of jobs lost at the hospital, he said closures impact the florist across the street and groundskeepers who maintain the lawn. Rural towns might have trouble attracting new residents if the closest hospital is miles and miles away.

Both Holmes and Slabach emphasized that Medicaid is not the only issue at play in rural hospital closures.

Slobach said rural communities tend to have residents who are disproportionately older, sicker, and poorer that non-rural communities, adding that changes to both Medicare and Medicaid could help rural hospitals shore up their finances.

But both men agreed that states expanding Medicaid, while not a silver bullet, would help rural hospitals.

“Anytime you have more revenue, that’s a good thing,” Holmes said. “It’s hard to imagine it would make things worse.”

In Missouri, residents are collecting signatures to put the issue of Medicaid expansion on the November ballot. In January, Republican Gov. Mike Parson publicly declared his opposition to a Medicaid expansion.

After the closure of Pinnacle Regional Hospital, the seventh rural hospital to close in Missouri since 2010, Democrats criticized Parson’s opposition.

“Missourians across the state are losing access to the health care they desperately need, yet Gov. Mike Parson refuses to do anything about it,” Christina Amestoy, deputy communications director for the Democratic Governors Association, said in a statement Monday.

“Medicaid expansion saves lives and saves hospitals, and it is unconscionable that Parson continues to stand in its way.”

Published with permission of The American Independent Foundation.