Becker's Hospital Review

8 CFO / FINANCE Rural hospital closures hit record high in 2019 — here's why By Ayla Ellison A bout 60 million people — nearly 1 in 5 Americans — live in rural areas and de- pend on their local hospitals for care. In 2019, 18 of those hospitals have closed, making 2019 a record year for rural hospital closures. Across the U.S., 119 rural hospitals have closed since 2010, according to the Cecil G. Sheps Cen- ter for Health Services Research. Of the 35 states that have seen at least one rural hospital close since 2010, Texas leads with 23 rural hospital clo- sures. It's followed by Tennessee, which has seen 13 hospitals close. A variety of issues have put rural hospitals in a fragile position. Low patient volume and heavy reliance on government payers are among the challenges rural healthcare organizations have faced for years. Newer challenges, such as the shi from inpatient to outpatient care, in- creased regulatory burden and the high cost of pharmaceutical drugs, also threaten rural hos- pitals' ability to maintain access to healthcare services, according to a report by the American Hospital Association. e Sheps Center began tracking rural hospital closures in 2005. Since then, 161 hospitals in ru- ral communities have shut down. e number of closures has steadily increased over the past three years. Many of the 18 rural hospitals that shut down so far last year faced reimbursement issues and cited dwindling patient volumes as reasons they were forced to close. e downfall of EmpowerHMS, a hospital oper- ator formerly based in Kansas City, Mo., pushed the total number of rural hospital closures to a record high last year. e company closed a handful of rural hospitals across the U.S. last year, and several of its hospitals are working their way through the bankruptcy process. e challenges rural hospitals are facing will likely persist in 2020, and more hospitals will close. Across the U.S., more than 600 rural hos- pitals are vulnerable to closure, according to an estimate from iVantage Health Analytics, a firm that compiles a hospital strength index based on data about financial stability, patients and quality indicators. n Hospital chain files for bankruptcy By Ayla Ellison A mericore Health and its four affiliated hospitals in Pennsylvania, Ken- tucky, Missouri and Arkansas entered Chapter 11 bankruptcy on Dec. 30, 2019. The bankruptcy petitions state that three of the hospitals — Ellwood Med- ical Center in Ellwood City, Pa., St. Alexius Hospital in St. Louis and Izard County Medical Center in Calico Rock, Ark. — each entered bankruptcy with less than $50,000 in assets and less than $50,000 in liabilities. Pineville (Ky.) Medical Center's assets total between $1 million and $10 million, and its liabilities are within the same range, according to the bankruptcy petition. Fort Lauderdale, Fla.-based Americore's affiliate hospitals faced financial troubles for months before the bankruptcy filing. Ellwood Medical Center shut down Dec. 10, laid off 152 employees and fell behind on payroll. n Mayo Clinic Health System to close hospital in March By Ayla Ellison M ayo Clinic Health System will close its hospital and clinic in Spring- field, Minn., and its clinic in Lamberton, Minn., on March 1, accord- ing to Minneapolis TV station KARE. James Hebl, MD, regional vice president of Mayo Clinic Health System, said the facilities face staffing challenges, dwindling patient volumes and other issues. The hospital in Springfield is one of eight hospitals within a 38-mile radius, which has led to declining admissions and "extremely low" use of the emergency department, Dr. Hebl said in a news release, according to KARE. "Mayo Clinic Health System has been proud to have a presence in Springfield and Lamberton over the past 22 years," Dr. Hebl said in December. "This is not the outcome we wanted for our patients, our staff or the community, but it's a decision that was necessary to make." The closures will affect about 60 employees, according to KARE. n Texas health system closes hospital, lays off 972 By Ayla Ellison N ix Medical Center, a 208-bed hospital in San Antonio closed in November 2019, and its medical equipment was sold at an auction Dec. 11. Nix Medical Center was part of Nix Health, which is owned by Los Ange- les-based Prospect Medical Holdings. In September 2019, Prospect Medical Holdings said it would close the hospital because community demand for acute care at Nix Medical Center had declined over the past year. Nix Health also closed its home health division and other facilities, includ- ing its specialty health and behavioral center. The combined closures were expected to result in more than 970 layoffs, according to a Worker Adjustment and Retraining Notification Act notice filed Nov. 6. Workers were laid off Jan. 4. n

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