Rural Hospital

Rural hospitals provide health care services to millions of people. Workforce shortages, rising health care costs, finding access to capital, and purchasing new information systems create a host of problems. Rural hospitals are smaller in size, have limited assets and financial reserves, and a higher amount of Medicare patients due to their populations being older than urban populations.

This guide provides resources related to rural hospitals including health care quality, health care systems, health networks, funding hospital renovations and capital equipment. Also, this guide includes resources that discuss the economic impact that a hospital has on a rural community.

Contacts

For information on small or rural hospitals
American Hospital Association Section for Small or Rural Hospitals

There are more organizations related to Hospitals in the organizations section.

Frequently Asked Questions


What are the various rural hospital designations/provider types?

Several types of special rural designations have been created. These are:

  • Critical Access Hospital (CAH)
    Rural hospitals with fewer than 25 acute care beds located at least 35 miles, or 15 by mountainous terrain or secondary roads, from the nearest hospital unless designated as a “Necessary Provider” by a state plan.
  • Sole Community Hospital (SCH)
    Rural hospitals with fewer than 50 acute care beds located at least 50 miles from the nearest hospital. Medicare payment to these hospitals is based on either their own historical costs or the PPS.
  • Medicare Dependent Hospital (MDH)
    Rural hospitals from whom Medicare represents at least 50% of all inpatient revenue.
  • Medicare Disproportionate Share Hospital (DSH)
    A special reimbursement program which is aimed at making up the short fall for hospitals when care is provided to a patient who has little or no funds to cover the costs. There are DSH programs for Medicare, Medicaid, and pharmacies, known as the 340B program.
  • Rural Referral Center Program (RRC)
    Rural tertiary hospitals who receive referrals from surrounding small primary care hospitals. An acute care hospital can be classified as an RRC if it meets several criteria pertaining to location, bed size, and referral patterns.

What are some challenges that rural hospitals face?

Rural hospitals face a series of issues. These include workforce shortages, rising health care costs, aging hospital facilities, finding access to capital, and purchasing new information systems. Rural hospitals are smaller in size, and have limited assets and financial reserves. Rural hospitals offer a broad range of services to meet the needs of their communities however, they often provide limited services in areas such as cardiac, alcohol and drug, psychiatric, and neonatal.

Rural hospitals have a higher amount of Medicare and Medicaid patients due to their populations being older. Patients may lack health insurance. Rural residents may have lower incomes and are more likely to suffer from chronic diseases.

Patients may lack transportation to reach alternative hospitals and may suffer from reductions in access to care when rural hospitals close.


What is the effect of health reform on small and rural hospitals?

Health reform for small and rural hospitals brings both opportunities and challenges.

Expansion of coverage should help improve access to care. The law includes various Medicare payment protections to enhance reimbursements to hospitals. Incentive programs and changes aimed at helping rural hospitals include rural physician incentive payments, low-volume hospitals payment adjustments, changes to graduate medical education resident placement, and changes in CAH, home health, and laboratory service payments.

Challenges including reimbursement rates, information technology, remoteness, low population density, financial resources to upgrade facilities, and primary care physician shortages, and other workforce shortages will continue.