At the Annual Issues Conference of the Workers’ Compensation Research Institute last week, Dr. Mark Holmes from the Sheps Center for Health Services Research at UNC delivered a sobering keynote on the growing threats to healthcare access in rural America. His presentation outlined how rural communities face systemic disadvantages in healthcare availability, accessibility, and financial sustainability that could worsen in the coming years.
Dr. Holmes began by addressing the fundamental challenges of healthcare access in rural communities. Using what he calls the “five A’s” framework—availability, accessibility, affordability, accommodation, and acceptability—he demonstrated that rural residents consistently face greater barriers across all dimensions.
Geographic data visualizations revealed stark disparities:
- Many rural residents, particularly in western states, live more than 15 miles from the nearest hospital
- Rural counties have significantly fewer physicians per capita compared to urban areas
- The specialist gap is particularly alarming: metropolitan areas have seven times more specialists per capita than the most rural counties
- Primary care disparities are somewhat better but still substantial, with urban areas having nearly double the primary care providers per capita
- Many rural areas qualify as “ambulance deserts” where emergency services are severely limited
These access gaps directly translate to worse health outcomes. Dr. Holmes highlighted that motor vehicle mortality rates are consistently higher in rural counties across every state, partly due to reduced access to trauma services and emergency care.
Perhaps most concerning is the financial precariousness of rural healthcare facilities. Dr. Holmes presented data showing:
- The average rural hospital loses 4-5% on patient care services, while urban hospitals average a 2% profit margin
- Even when including all revenue sources, rural hospitals only average 1-2% total margins compared to 6% for urban facilities
- This gap has been widening over time, with rural facilities showing a downward trend even before the pandemic
These thin margins make rural facilities particularly vulnerable to market disruptions. When COVID-19 hit in early 2020, both rural and urban facilities saw patient margins plummet as elective procedures were suspended while expenses—particularly for PPE and traveling nurses—skyrocketed.
Federal support through the CARES Act provided critical lifelines, with rural hospitals receiving subsidies averaging about 12% of their previous year’s operating expenses (compared to 5% for urban hospitals). This support temporarily stabilized the situation, but as these funds expire, the underlying financial fragility remains.
Since 2010, at least 152 rural hospitals have closed across America, with concentrations in the South from Texas to North Carolina. These closures have profound implications beyond just healthcare:
- EMS transport times increase by 2.5 to 4.5 minutes on average—potentially critical minutes for trauma patients
- Communities see more admissions for preventable conditions and fewer for emergencies, suggesting that some patients may be dying before reaching care
- Economic impacts extend beyond healthcare, as hospitals are typically among the top two employers in rural communities
- When hospitals close, communities experience decreased per capita income, population decline, and increased unemployment
Dr. Holmes emphasized that rural hospitals often serve as anchors for their communities. He cited research from Appalachia finding that in counties with better-than-expected health outcomes, the local hospital was invariably at the center of community health initiatives.
Rural healthcare is adapting to these challenges through several approaches:
- Rural Emergency Hospitals: A new designation created by federal legislation allows rural hospitals with fewer than 50 beds to close inpatient services while maintaining emergency departments and outpatient care. Facilities receive approximately $3 million in transition funding. So far, 36 hospitals have converted to this model, with 30 concentrated in Texas and surrounding states.
- Health System Integration: An increasing percentage of rural hospitals are joining larger health systems. While this can provide financial stability, it may lead to service consolidation away from rural areas, requiring patients to travel farther for care.
- Service Reduction: Many rural facilities are scaling back services, particularly in labor and delivery, home health, and skilled nursing—creating additional access challenges for rural residents.
Looking ahead, Dr. Holmes identified several policy areas that could further threaten rural healthcare:
- Potential Medicaid reforms, particularly significant given that rural populations have higher Medicaid coverage rates than urban areas (2-3% higher overall)
- Growing Medicare Advantage penetration in rural markets, which hospital administrators report creates additional financial pressures
- Market reforms, including potential weakening of certificate of need regulations and private equity investment in rural healthcare
- Declining marketplace coverage that could increase uncompensated care
Dr. Holmes concluded that there’s no “silver bullet” solution. Success stories exist—particularly in the Upper Midwest—but often reflect specific community circumstances rather than easily replicable models. He emphasized that innovation frequently stems from necessity, with rural communities leveraging unique local assets like faith-based networks, EMS downtime, and targeted service development based on community needs.The presentation emphasized that addressing rural healthcare challenges requires understanding both the financial realities of healthcare delivery and the broader social and economic contexts of rural communities. As policymakers consider healthcare reforms, the particular vulnerabilities of rural healthcare systems—and the communities that depend on them—must be carefully considered.
Artificial intelligence was used in the transcription of this lecture.