Rural Hospitals: Offering Healthcare To Small Communities

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Rural hospitals are a critical component of the healthcare system. These healthcare facilities provide services to smaller communities that are often in greater need of access to care. However, the size of rural hospitals can present some financial challenges. For some community hospitals, the critical access hospital (CAH) designation is a solution.

Rural Hospitals vs Critical Access Hospitals Understanding the CAH Designation

What is a rural hospital?

Rural hospitals, as the name implies, serve rural areas of the US where less than 19% of the population live. Often, these communities are made up of farmers, farm workers, small businesspeople, and agricultural suppliers. These people often must travel longer distances to gain access to healthcare.

What is a critical access hospital?

CAH-designated hospitals receive certain benefits to ensure staying open, such as cost-based reimbursement for Medicare services. To qualify for CAH designation, hospitals must:

  • Have 25 or fewer acute care inpatient beds
  • Be at least 35 miles away from the next nearest hospital
  • Provide 24/7 emergency care services
  • Have an annual average length of stay of less than 96 hours for acute care patients

CAH status does not necessarily equate to a hospital that is financially better-off. The status should only be considered when determined beneficial for the community and the hospital service area.

Challenges of rural hospitals

CAHs often have a more difficult time offering the lucrative healthcare services that are big cash services for urban counterparts. Because of location and size, rural healthcare facilities also can struggle to achieve economies of scale and don’t have a large enough volume of commercial payers in the payer mix to help cover costs. Additionally, recruitment to rural areas can be challenging, which makes staffing services such as emergency staffing solutions a key resource in providing high-quality care.

Mutual benefits for the hospital and community

Research has shown that quality rural health emergency services helps attract more businesses and industries to rural areas. Rural hospitals are typically among the largest employers in the respective communities, and critical access hospitals employ an average of 141 people. Keeping these facilities open and financially sustainable is key not just to the success of the hospital but to the success of the entire community.

Understanding CAHs

CAHs are reimbursed based on the facility’s Medicare costs. The designation is a payment program that provides consideration for the special circumstances of some rural hospitals. The CAH designation is not right for all rural hospitals, but, in some cases, the program could be a solution for continuing to offer access to high-quality care to the communities that are most in need.