Impact of Rural Hospital Closures on Healthcare Costs and Access

Rural hospital closures have significant effects on healthcare accessibility and costs for local populations. Recent research conducted by the University of Minnesota School of Public Health reveals a concerning trend: the closure of rural hospitals not only limits access to essential care but also leads to increased prices at the remaining nearby hospitals. This study, covering hospital closures from 2014 to 2018, analyzed 54 rural hospitals and tracked the pricing dynamics at their three closest functioning hospitals over a ten-year period.

The findings show that when a rural hospital closes, it effectively removes a low-cost healthcare option from the region. As a result, the remaining hospitals tend to raise their prices, with commercial inpatient treatment costs increasing by an average of 3.6%, or approximately $500 per stay. This effect is particularly pronounced in hospitals wielding market power—those affiliated with larger health systems or located in less competitive markets.

Interestingly, the study also found that the hospitals which closed initially charged about 6% less than their competitors. Their closure thus shifts patient volume to higher-priced facilities, escalating overall healthcare expenses for the community.

According to Caitlin Carroll, the lead author and assistant professor at the School of Public Health, rural hospital closures make it harder for residents, especially those with urgent health needs, to access timely care. Additionally, these closures contribute to higher healthcare costs, making affordability more challenging even for patients who did not directly use the closed facilities.

This research underscores the complex fallout from rural hospital closures—diminished access and increased financial burden. Policymakers and healthcare providers must consider these consequences when addressing the needs of rural communities to ensure sustainable and equitable healthcare delivery.