Hospitals and health systems play a critical role in ensuring rural patients in America have access to care. They are increasingly reinvesting through access points such as hospital outpatient departments (HOPDs) to fill gaps in access to care. These care sites provide essential services to rural and low-income communities. Too often, hospitals have been a lifeline for struggling rural doctors — helping them stay open. At the same time, HOPD remains a critical access point for convenient, high-quality care for patients with more complex care needs.1
Hospital provides care to rural communities
The economic challenges of providing care in rural communities create disparities in access. Rural communities by their nature have smaller populations and therefore cannot generate health care utilization to fund the full range of health care services. Additionally, the cost of caring for each rural patient may be higher because patients in rural communities tend to have more complex health needs, are more likely to be uninsured, and are more likely to rely on public programs (when they have care) for coverage. So it’s no surprise that many providers have been struggling to stay open and provide care to patients and communities. However, hospitals are disproportionately involved in supporting these access points for patients in rural communities. For example, hospitals are two and a half times more likely than other entities, including commercial insurance companies, to be licensed to practice medicine in rural areas.2
Commercial insurers are particularly focused on larger, more profitable markets where financial advantages are greater. Median household income is on average 18.4 percent higher in counties where insurance companies acquire physician practices than in counties where hospitals acquire physician groups (see Figure 1). In addition, commercial insurance companies have an average of 61.4% more county-level residents with doctor qualifications than hospitals.
Rural patients are overly reliant on hospitals for care needs
HOPD is an important source of care for Medicare recipients and persons dually eligible for Medicaid in rural areas. The more remote the county in which a Medicare beneficiary lived, the more likely their visits were at a HOPD rather than a physician’s office.4 For example, for patients from counties where 90% or more of the population lives in rural areas, 36% of visits are provided through HOPD. In counties with the least rural populations, this number drops to 25% of visits (see Figure 2).
Hospitals also disproportionately care for their most vulnerable patients
Dual-eligible Medicare beneficiaries Medicaid also relies more heavily on HOPD for outpatient care than non-dual status individuals, with 40% of visits receiving through HOPD compared with 32% of non-dual status individuals (Figure 3). This reflects, in part, the more complex clinical needs of the dual-eligible population. Among dual-eligible Medicare beneficiaries who receive most outpatient visits through HOPD, 72% have complications or comorbidities (CC), compared with 64% for most patients who visit independent physician offices. Additionally, these HOPD patients had an average of 5.2 CCs, compared with an average of 3.6 for most independent physician office cases. These trends also apply to patients with severe complications or comorbidities (MCC): 38% of most HOPD cases have MCC and 25% of independent physician office cases have MCC.
These facts demonstrate the huge role hospitals play in providing 24/7 care to the most vulnerable in every community across the country.
Hospitals and health systems play a critical role in ensuring patients across the country have access to care and services. In rural communities, hospitals are increasingly reinvesting in HOPD to maintain local care for the seniors who most rely on and use it. HOPDs provide care for Medicare patients who may be sicker and more complex than those treated in a physician’s office, while adhering to stricter safety and regulatory requirements. This is especially true in rural communities, where additional site-neutral funding cuts being considered by Congress will have a direct impact on the level of care and services available to vulnerable patients in these communities. The American Heart Association continues to urge Congress to reject Medicare payment cuts that would reduce access to essential care and services for communities, especially rural and underserved areas.
2 AHA analysis of physician medical group data from Levin Associates between 2019 and 2023.
3 Excluding acquisitions of physician practices as compared to other entities, including commercial insurance companies, private equity firms, and other entities
Through the practices of other physicians.
4 KNG Health Consulting uses the 2019-2021 5% clinic and carrier standard analysis files for calculations.