Pandemic volume changes underscore rural hospital concerns

A new study in Health Affairs finds that rural hospitals experienced more variability in patient volume during the first two years of the COVID-19 pandemic than their urban counterparts. However, these dramatic shifts in volumes, whether in rural or urban areas, were associated with negative financial impacts.

Rural hospitals faced unique operational and financial challenges compared to urban hospitals even before the pandemic. However, different levels of volume shifts during the pandemic may have exacerbated some of the issues rural hospitals already experience, including workforce shortages, financial distress, and elimination of service lines.

To determine how much rural hospital volumes shifted during the pandemic, researchers from the Agency for Healthcare Research and Quality, Lewin Group, Everytown for Gun Safety, and RAND Corporation compared daily inpatient volume at rural and urban hospitals during the pandemic period (March 8, 2020–December 31, 2021) with volume during the prepandemic period (January 1, 2017–March 7, 2020). They used all-payer hospital discharge data from the Healthcare Cost and Utilization Project.

Researchers found a dose-response relationship between community COVID-19 burden and average daily medical volume at rural hospitals. Volumes ranged from a 13.2% decrease in patient volume in periods of low transmission to a 16.5% increase in volume in periods of high transmission.

Rural hospitals were also more likely to experience more extreme fluctuations in patient volumes during the pandemic, with about 35% of rural hospitals seeing changes over 20% in either direction in average daily total volume. In contrast, only 13% of urban hospitals saw similar magnitudes of changes in patient volume during the period.

Rural hospitals that experienced these dramatic shifts in patient volume tended to be smaller, government-owned, and have critical access designation. They were also more likely to have lower operating margins.

But whether hospitals operated in urban or rural areas, patient volume decreases of more than 20% were tied to greater financial distress. The study showed that one in four hospitals that experienced this level of change were financially distressed. Even hospitals that experienced increases in patient volume of 20% or more during the pandemic didn’t necessarily fare better financially, likely because of the higher cost of care during the pandemic.

“[T]hese findings help shed light on how the COVID-19 pandemic influenced the demand for care in rural areas, as well as the capacity and financial viability of rural hospitals,” researchers wrote in the study.

They explained that even urban hospitals struggled during the pandemic to meet care demand with an appropriate level of staff and care for all patients, including those with the highly contagious COVID-19 virus. However, they said the challenge was likely more significant for rural hospitals, which already lacked adequate clinical expertise, equipment, staff, partnerships, and financial resources.

“Rural hospitals have cash flow and labor shortage problems, which can make it more difficult to handle volume swings,” researchers stated. “Substantial declines or increases in volume could significantly affect the operation and finance of these hospitals. Although a persistent decrease in volume could force a hospital to cut services and personnel, further reducing access to care for rural residents, a substantial increase in volume could deplete existing resources and staffing levels and lead to staff burnout and poor quality of care.”

The study’s findings raise the question of whether many rural hospitals would have survived in the long run without financial assistance from the government during the COVID-19 pandemic and if patient volumes did not return to pre-pandemic levels. Researchers called for additional research on how dramatic changes in patient volumes may affect quality and cost of care, as well as the long-term viability of rural hospitals.