Report: One-third of Missouri’s rural hospitals at risk of closure

Rural hospitals facing financial challenges.
Published: Aug. 7, 2023 at 5:52 PM CDT|Updated: Aug. 7, 2023 at 6:26 PM CDT
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JEFFERSON CITY, Mo. (KFVS) - The Center for Healthcare Quality & Payment Reform reports that 19 of Missouri’s rural hospitals are at risk of closing, half of them immediately, due to their financial circumstances.

The report shows more than 600, or roughly 30%, of hospitals in rural areas face such challenges.

Though the report did not cite the names of the facilities, it showed 60 rural hospitals in Kansas, 12 in Illinois and 19 in Missouri at risk of closing. Roughly half of those listed represent hospitals that the report identifies as at risk of closing “immediately” because of two main reasons:

  • Inadequate Revenues to Cover Expenses: Hospitals lost money providing patient services for multiple years. The report warns the hospitals that fall into this category are unlikely to receive funding from other sources to cover the losses now that federal COVID-19 funding is no longer available.
  • Low Financial Reserves: Hospitals either owe more than their assets, or net assets they do have will not offset losses for more than three years.

Rural hospitals see fewer patients, they exist in areas that are more difficult to recruit employees, they’re less accessible, and they’re not reimbursed the same through health insurance plans.

“In many cases, the [rural] hospital is the only source of health care in that community,” CHQPR’s founder and CEO Harold Miller said. “It’s not only an emergency department, but laboratories, imaging, even primary care in some cases are supported by rural hospitals. So, when a rural hospital closes, it may mean that there’s literally no healthcare services left in the community.”

Missouri has seen 10 rural hospitals close since 2005, with 57 currently open across the state.

Heidi Lucas heads the Missouri Rural Health Association.

“It was able to lift them up a bit and help keep them in business for a while longer,” Lucas said. “However, now that that money is dried up, we need to really look at the root of the problem.”

Because smaller hospitals don’t have as much bargaining power with insurance companies, they’ll often get reimbursements that don’t cover the cost of the services they provide, leaving the hospital at a negative margin. Meanwhile, those costs have continued rising.

“All health insurance plans need to pay adequately for health services in rural areas. It doesn’t do any good for someone to have insurance if they have no place to use it,” Miller said. “If you don’t pay adequately for the services in that community, then you’re not going to be able to maintain those services in the community.”

A new law in Missouri changes the definition of “hospital” to now include rural emergency centers, opening the door for some of these small facilities to apply for millions in federal dollars.

Top 5 rural Missouri hospitals at risk of closure:

Scotland County Hospital (Memphis, Missouri)

  • Patient Services Margin: -21.6%
  • Total Margin: -8.5%

Lafayette Regional Health Center (Lexington, Missouri)

  • Patient Services Margin: -0.9%
  • Total Margin: -6.4%

Fitzgibbon Hospital (Marshall, Missouri)

  • Patient Services Margin: -4.4%
  • Total Margin: -5.6%

Ray County Memorial Hospital (Richmond, Missouri)

  • Patient Services Margin: -10.4%
  • Total Margin: -4.2%

Bothwell Regional Health Center (Sedalia, Missouri)

  • Patient Services Margin: 9.6%
  • Total Margin: -4.1%

See the full list by following this link.