Business of Health Care: Rural Health Care

Aug 2, 2019

Since 2010, at least 97 rural hospitals across 27 states have closed. Another 21 percent of remaining rural hospitals are at risk of closing – including 127 in Texas.


One of the greatest challenges rural hospitals face is simple economics. The quantity of medical services demanded in sparsely populated areas is often too low to cover the cost of offering those services. 

In addition, because most patients using rural hospitals are covered by government-sponsored insurance programs like Medicare and Medicaid, these care providers are especially sensitive to government reimbursement rates and policy changes. 

In Texas, Baylor Scott & White and other advocates for increasing health care access have begun exploring a series of policy opportunities with state lawmakers to help preserve critical health care access points and services in rural areas.

One specialty policymakers are particularly interested in is obstetrics health – ensuring women who are pregnant in rural areas have access to the care they need for a healthy pregnancy and delivery.

On a federal level, bills in the Senate and House are aimed at giving rural hospitals greater flexibility by creating step-down hospital classifications that would, for example, allow these facilities to maintain emergency and outpatient services without accompanying inpatient care.

Another strategy is reversing Medicare payment reductions in recent years that have hit rural hospitals particularly hard.

However, despite bipartisan support to find legislation that addresses the immediate concerns of closure and cuts, the challenges facing rural hospitals and providers more broadly are likely to persist for the foreseeable future.