A Practical Policy Proposal to Solve the Rural Hospital Puzzle

Since the 1980s, waves of rural hospital closures have intermittently plagued the U.S. health care landscape. Although the Affordable Care Act and its expansion of Medicaid have provided a vital lifeline to rural hospitals over the last decade, policy makers have yet to implement a permanent solution powerful enough to stabilize and offset the institutional and populational constraints that have promulgated the widespread hospital closure crisis plaguing rural communities. This article argues that rural hospitals need to repurpose themselves to better serve the demands of their patient populations in order to survive the unique demographic and economic challenges they face. This article also argues that a new Medicare payment designation status is warranted. This status, known as a “Rural Emergency Hospital,” allows rural hospitals to eliminate exorbitant overhead costs of inpatient services and instead utilize their existing infrastructure to provide outpatient services or transfer services for those requiring inpatient care. Rural Emergency Hospital status would further benefit these facilities as it carries a considerably higher reimbursement rate at 110% of cost compared to the current 101% reimbursement rate for Critical Access Hospitals