Healthcare In Rural Areas Across Country Need — And Get — ALC’s Help
Welcome back to Build Your Dream.
In multiple studies over the last decade, increased travel distances to healthcare facilities in rural areas have been associated with poorer health outcomes, particularly for those with chronic conditions or those requiring specialized care. Higher rates of preventable deaths in rural areas are directly related to this issue.
Some of these issues are self-evident. If it takes a half hour or more to get to the health clinic, people are less likely to go in the first place. In emergency situations, every minute more it takes to get to medical help increases the likelihood of permanent damage or death.
There also are less obvious barriers to proper healthcare outside of urban areas, as well. Public transportation is pretty much nonexistent, and rideshare or taxi services are far less available. Rural areas face significant shortages in healthcare providers, even if facilities are available. Most concerning is the trend of increasing rural hospital closures. Per Becker’s Hospital CFO Report, 104 rural hospitals have closed since 2005. More than 600 additional acute care facilities are at risk of closing in the near future.
Here are a few reasons why.
Finding The People
Doctors, nurses and medical technicians are in short supply countrywide, according to multiple industry journals. That’s true in large urban hospitals as well as small town family practice offices. Convincing young people starting out in medical careers to move to and work in rural facilities – especially those not in towns associated with recreational opportunities – can be a daunting task.
Incentives including paying for medical school are used by those who can afford it, and government support can make a difference. But competition from large urban hospitals willing and able to provide those same incentives makes attracting and keeping medical staff an uphill battle for rural medical facilities.
Balancing The Books
Acute care hospitals in general can have a hard time breaking even thanks to indigent care needs, low Medicare reimbursement and, at least in California, regulations like seismic retrofit requirements. Rural hospitals don’t have the advantage of volume seen in cities, where hospital patients with private insurance can help make up for low- or no-paying patients.
According to the Rural Health Information Hub, “The majority of small rural hospitals are losing money delivering patient services. More than 100 rural hospitals have closed in the past decade, and most of these were small rural hospitals. In most cases, the closure of the hospital resulted in the loss of both the emergency department and other outpatient services, and residents of the community must now travel much farther when they have an emergency or need other healthcare services.”
The supply-and-demand issue has been exacerbated by changes in rural demographics. In addition to the ongoing battle against the flight of young people seeking jobs in urban areas, those who stay are having fewer children and having them later. The remaining rural population continues to age, meaning a greater need for healthcare, often paid through Medicare – typically lower than when private insurance is billed.
Consolidation
When one rural hospital closes, the people it served must travel further for healthcare, particularly those living in isolated communities. This is true for acute care hospital services, but also for more general healthcare requiring facilities, such as colonoscopies or mammograms. Even basic services can be at risk. Some areas have resorted to health clinics in towns affiliated with one central hospital. However, clinics seldom offer emergency or trauma care, and rarely provide maternity services.
For example, the San Luis Valley in Colorado covers 8,000 square miles (the size of the state of Rhode Island) and has 19 incorporated towns along with many smaller settlements. There is one hospital with 49 acute care beds, an emergency department and maternity services in centrally located Alamosa – some of the other towns have clinics with varying healthcare capabilities. About 16,500 people live in the sparsely populated high mountain desert valley.
San Luis Valley Regional Health Center is considered a large rural hospital – small rural hospitals are 25 acute care beds or less. Even so, their website promotes the fact that an air ambulance is on call at the nearby airport to take patients to hospitals in larger cities for serious medical and trauma cases.
Modern Technology
Our country’s experience with the COVID-19 pandemic forever changed the approach to healthcare in both urban and rural areas. One result has been an increasing reliance on telehealth, also known as remote healthcare. At first glance, telehealth would appear to be a solution for rural healthcare, where distance between patient and doctor can be a large barrier. An Internet-based appointment can provide face-to-face interaction, if not physical examination. But people must have Internet access to make that work.
“Many rural residents may turn to telehealth services — health care services delivered via phone or video — when care isn’t available locally,” the website GAO.gov says. “Telehealth can be an option to address limited provider availability in rural areas. However, we found that, as of 2019, at least 17% of people living in rural areas lacked broadband internet access, compared to 1% of people in urban areas.”
Making A Difference
Here at American Lending Center, we have been aware of the rural healthcare crisis for some time. That’s why we have been pleased to participate in financing for new and refurbished rural hospitals.
Most recently, we were on hand at the ribbon-cutting for the UAB Medical West Hospital in Alabama. That large rural hospital in Bessemer will serve a large section of rural Alabama when it opens this month. On the West Coast, ALC is part of the financing for a replacement hospital, Samaritan Healthcare, in central Washington state that serves the Colombia Basin and five small towns there. That hospital is scheduled to open in 2026 with 50 beds and a full range of patient services.
Going forward, it is our intention to continue focusing on improving rural healthcare across the country. It is a pressing need and a way to make our country a better place.
It is a way to Build Your (and Our) Dream.
John Shen
CEO & co-founder
American Lending Center
About American Lending Center: A Financial Times (FT) America’s Fastest Growing Company
American Lending Center (ALC) is a private nonbank lending institution and nationally recognized leader in small business lending.
In early 2024, ALC has fully financed senior loan products to 94 qualified EB-5 projects in 31 states, contributing to a combined construction and business expansion budget of over 1.2 billion dollars. ALC’s lending practice has successfully created more than 20,000 new jobs nationwide since 2009.
In 2022, ALC launched its new rural construction and development fund with capital available for the construction of fixed assets of all types in rural areas including manufacturing, energy, infrastructure, hospitality, specialty use, multi-use and other project types. Follow American Lending Center on LinkedIn, Facebook, and Twitter.