Rural healthcare providers face unprecedented operational and financial struggles which threaten patient access, the ability to provide high quality care, and the existence of the healthcare ecosystem itself. Every day, rural hospitals and health systems either discontinue service lines or close their doors entirely, leaving patients to drive long distances to find preventive, emergency, inpatient, and specialty care. This can create a downward spiral for a community that is often difficult to recover from.
The Sober Landscape of Healthcare in Rural America
Rural healthcare organizations are grappling with dire financial pressures. According to a 2024 study by the Chartis Center for Rural Health1:
- Over a 12-month period, the percentage of rural hospitals with a negative operating margin increased from 43% to 50%.
- More than half of independent rural hospitals (55%) and 42% of health system-affiliated rural hospitals are operating at a loss.
At the same time, healthcare leaders are contending with labor shortages, declining rural populations, and decreasing reimbursements. All of these factors combine to fuel a downward cycle. In many cases, rural hospitals and health systems often resort to closing service lines.
Over a ten-year period (2011 to 2021), for example, nearly 25% of rural obstetric units closed.2 Meanwhile, between 2014 and 2022, 382 rural hospitals stopped providing chemotherapy services.3
As healthcare options dwindle, patients must travel further, with many seeking services at urban care facilities. For instance, a study conducted at the University of Minnesota found that rural women diagnosed with breast cancer traveled on average nearly three times as far for radiation treatment as women living in urban areas.4 Conventional radiation therapy requires treatment five days per week for 5 to 7 weeks at a time. This means that the average rural woman logs more than 2,000 miles over the course of treatment.
Across the nation, growing numbers of rural healthcare organizations are being forced to cease operations completely, leaving “healthcare deserts” in their wake. Since 2014, close to 200 rural hospitals have closed, leaving communities without access to emergency departments or inpatient care.5
The Center for Healthcare Quality & Payment Reform estimates that in 2024, over 30% of all rural hospitals (around 700 facilities) are at risk of closing due to financial problems and over half (364) are at immediate risk of closing.6 Every closure deprives communities of essential healthcare services, and triggers economic disruption as jobs are eliminated.
The impact of this healthcare crisis can’t be ignored—20% of Americans live in rural areas and research suggests these individuals are at higher risk of death from heart disease, cancer, unintentional injury, chronic lower respiratory disease, and stroke than their peers who live in urban areas.7 At the same time, only around 9% of U.S. physicians practice in rural areas.8
Price Transparency Data — The Fuel for a Rural Healthcare Renaissance
In recent years, opaque healthcare pricing in the United States has gained broader visibility. Regulatory changes like the Hospital Price Transparency Rule9 and the Transparency in Coverage Rule10 are generating new opportunities to positively impact the financial performance and operational costs at rural healthcare organizations.
| Ruling | Requirements |
|---|---|
| Hospital Price Transparency Rule | Hospitals must publicly disclose pricing information about items and services they provide. This includes standard charges for all items and services, gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges. |
| Transparency in Coverage Rule | Insurers must publicly disclose cost-sharing information to consumers. This includes negotiated rates with in-network providers, historical payments to out-of-network providers, and historical payments to out-of-network providers. |
With these price transparency rulings, much attention has been given to conforming to CMS-mandated machine-readable file (MRF) requirements and submissions. At many rural healthcare providers, a primary focus has been on securing the staffing and expertise needed to ensure compliance.
Price transparency data collection isn’t just a compliance exercise, however. This information holds significant strategic value for organizations. When rural healthcare providers have visibility into how much competitor organizations are paid for the same services, they suddenly have greater power to negotiate more favorable prices and to start rebuilding their own financial wellbeing.
By leveraging the insights that exist within price transparency files, rural healthcare organizations can:
- Leverage benchmarks to improve pricing strategies and enhance competitiveness by comparing rates across payers and geographies
- Identify growth opportunities based on utilization trends and highly utilized services
- Optimize strategic planning process to plan effectively to meet demands for the future
Conclusion
To reinvent America’s rural healthcare infrastructure, hospitals and health systems must move beyond merely complying with price transparency rulings. By shifting their attention to the insights within this data, organizations can develop strategies that will enable them to care for their communities in financially sustainable ways.
In our next blog post, we will explore how rural healthcare providers can uncover new sources of competitive advantage in the sea of price transparency big data.
All data within CompleteVue is based on publicly available price transparency machine readable files, Medicare rates, and third-party benchmark data.
1 Chartis. (2024, February 13). Unrelenting pressure pushes rural safety net into uncharted territory | Chartis. Healthcare Advisory Services and Analytics | Chartis. https://www.chartis.com/insights/unrelenting-pressure-pushes-rural-safety-net-uncharted-territory
2 Chartis. (2024, February 13). Unrelenting pressure pushes rural safety net into uncharted territory | Chartis. Healthcare Advisory Services and Analytics | Chartis. https://www.chartis.com/insights/unrelenting-pressure-pushes-rural-safety-net-uncharted-territory
3 Chartis. (2024, February 13). Unrelenting pressure pushes rural safety net into uncharted territory | Chartis. Healthcare Advisory Services and Analytics | Chartis. https://www.chartis.com/insights/unrelenting-pressure-pushes-rural-safety-net-uncharted-territory
4 Plain, C. (2020, February 11). U.S. rural breast cancer patients must routinely travel long distances for treatment – School of Public Health – University of Minnesota. School of Public Health. https://www.sph.umn.edu/news/u-s-rural-breast-cancer-patients-must-routinely-travel-long-distances-for-treatment/
5 Center for Healthcare Quality and Payment Reform. (2024). RURAL HOSPITALS AT RISK OF CLOSING. https://ruralhospitals.chqpr.org/downloads/Rural_Hospitals_at_Risk_of_Closing.pdf
6 Center for Healthcare Quality and Payment Reform. (2024). RURAL HOSPITALS AT RISK OF CLOSING. https://ruralhospitals.chqpr.org/downloads/Rural_Hospitals_at_Risk_of_Closing.pdf
7 About rural health. (2024, May 16). Rural Health. https://www.cdc.gov/rural-health/php/about/index.html
8 Calling All Country Doctors: Study Challenges assumptions about rural physician recruitment. (n.d.). The University of Vermont. https://www.uvm.edu/news/larnermed/calling-all-country-doctors-study-challenges-assumptions-about-rural-physician
9 Hospital Price Transparency | CMS. (n.d.). https://www.cms.gov/priorities/key-initiatives/hospital-price-transparency
10 Transparency in Coverage Final Rule Fact Sheet (CMS-9915-F) | CMS. (2024, November 22). https://www.cms.gov/newsroom/fact-sheets/transparency-coverage-final-rule-fact-sheet-cms-9915-f
