Rural hospitals survive longer if they receive financial assistance from USDA’s Community Facilities loan and grant program, according to a study by USDA’s Economic Research Service.
Hospitals that got USDA funding were 94% less likely to close six years later than similar hospitals that didn’t receive the department’s assistance. The USDA-assisted facilities also were 88% less likely to fail after 10 years, the study found.
Some 146 rural hospitals have either closed or been converted to non-acute care since 2005, the study found. Eighty-one hospitals were shut down completely over that period.
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“Compared with their urban counterparts, U.S. rural hospitals face financial stress due to several unique conditions: Hospitals in rural areas are usually smaller, more vulnerable to fluctuations in the economy, and have lower occupancy rates. As a result, their profit margins are generally lower compared with those of urban hospitals,” the report said.
From 2000 to 2020, USDA provided $4.7 billion to hospitals in non-metro counties through the Community Facilities program, with the largest share, $1.8 billion, going to hospitals in the Plains states. Rural hospitals in the Southeast received $1.1 billion.
