Rural hospital closures directly impact the health of rural Americans by reducing access to care. New research from the University of Minnesota School of Public Health sheds light on another consequence of these closures: rising prices at 'surviving' rural hospitals. This first-of-its-kind analysis shows that when a rural hospital closes, it eliminates a low-price, potentially more affordable hospital from the region. Moreover, commercial prices at nearby hospitals increase by 3.6% in the years following a closure.
The research team analyzed 54 rural hospitals that closed between 2014 and 2018. To gauge price differences in the years before and after each rural hospital closure, the researchers tracked prices at the three nearest surviving hospitals from 2012 to 2022.
The study, published in Health Affairs, found:
- After a hospital closed, commercial prices for inpatient treatment increased by 3.6% at surviving hospitals - an average of about $500 per inpatient stay.
- The highest price increases were concentrated among surviving hospitals with market power - hospitals with system affiliations and hospitals operating in less competitive markets.
- Rural hospitals that eventually closed charged about 6% less than nearby hospitals, so their closure moved patients into higher-priced facilities and eliminated low-price options from the market.
"When rural hospitals close, patients - including those with time-sensitive health conditions - have a harder time accessing care," said Caitlin Carroll, an assistant professor in the School of Public Health and lead author. "There is an additional concern - that rural hospital closure can lead to higher prices and erode affordability, even for patients who didn't use the closed hospital when it was still in business."
This research was supported by Arnold Ventures.
About the School of Public Health
The University of Minnesota School of Public Health improves the health and wellbeing of populations and communities around the world by bringing innovative research, learning, and concrete actions to today's biggest health challenges. We prepare some of the most influential leaders in the field, and partner with health departments, communities, and policymakers to advance health equity for all. Learn more at sph.umn.edu.
