Accounting and Financial Reporting

A scarcity of rural ICU beds means little revenue amid the COVID-19 resurgence

August 4, 2020 2:35 pm
  • More than half of low-income rural areas lack ICU beds.
  • Hospitals in rural areas may face a double hit from bans on elective procedures and a lack of offsetting revenue from COVID-19 cases.
  • Rural hospitals may need assistance to survive the pandemic’s financial effects.

Hospitals in the early stages of the coronavirus pandemic relied on payments for the treatment of COVID-19 patients to help bolster their finances. But the recent resurgence in southern and western states is depleting revenue for rural hospitals that lack intensive care beds, advocates and researchers say.

The Federation of American Hospitals (FAH) recently issued a brief, produced in conjunction with FTI Consulting, that outlines the pandemic-related financial challenges for hospitals, especially those in rural communities. The analysis was part of a push to get Congress to provide relief for hospitals that this month must begin repaying Medicare advance-payment loans.

The analysis included a range of findings on the vulnerable position of rural hospitals, including:

  • Among rural hospitals in 20 states, 66% lack ICU beds.
  • Median cash on hand at rural hospitals would cover just 33 days of expenses.
  • Twelve rural hospitals have closed this year.

Hospitals in some areas of the country — including Florida, Alabama, Texas and Arizona — again are being forced to cancel scheduled, nonemergency procedures in response to a surge in COVID-19 cases. Elective surgery shutdowns are eliminating a major revenue source, while the lack of ICUs at rural hospitals in such states means they cannot make up any of that lost revenue.

“For hospitals that do not experience an influx of COVID-19 patients, the cost of ongoing preparedness while overall patient volume declines is especially devastating,” the analysis states.

Study finds significant access gaps

The FAH analysis echoed new findings in research published Aug. 3 in Health Affairs by researchers from the University of Pennsylvania Perelman School of Medicine.

That study found wide disparities in nationwide access to ICUs, with the biggest gaps occurring in rural areas served by facilities without ICUs.

Key findings included:

  • Of the lowest-income communities, 49% had no ICU beds.
  • Of the highest-income communities, 3% had no ICU beds.
  • Of urban low-income areas, 31% had no ICU beds.
  • Of rural low-income areas, 55% had no ICU beds.

“Low-income communities have far fewer ICU beds per capita than wealthier communities,” the authors wrote. “Because low-income communities are also likely to have higher incidence of COVID-19 and higher prevalence of the chronic medical conditions that increase the probability of life-threatening illness among people with COVID-19, the adverse effects of the low supply of ICU beds in low-income communities may be compounded by disproportionately high demand for ICU care in the COVID-19 pandemic.”

Genevieve Kanter, an assistant professor at the University of Pennsylvania Perelman School of Medicine and a study author, noted in an interview that rural areas also have higher shares of older residents, who are more vulnerable to COVID-19.

Changes needed to bolster critical care

The researchers recommended several steps to address the challenges for rural areas, including:

  • Emergency expansion of ICU capabilities by state and municipal policymakers
  • Planning for how and when to transport patients to hospitals outside their immediate communities
  • Provision of emergency funds for hospitals to build ICU services

The researchers noted that rural areas will have a hard time building ICU capacity on their own, since many of their patients lack extensive insurance coverage and the costs of care often exceed payment rates.

The U.S. Department of Health and Human Services specifically targeted $11 billion to rural providers from among provider emergency funds appropriated by Congress. However, it was not clear whether any rural hospitals used those funds to add temporary ICU capacity, Kanter said.

There have been efforts to coordinate hospital transfers at the state level, including in New York and Michigan, she noted.

New York City “has also made important efforts in expanding temporary ICU capacity,” Kanter said.


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