Rural Healthcare Crisis: Research Says 1 in 4 Rural Michigan Hospitals At Risk Of Closing

Cheboygan Hospital Has New Model After 2012 Closure & Reopening

A rural healthcare crisis is the conclusion of a new study.

Research from Navigant shows 25% or 1 in 4 hospitals in rural Michigan are at risk of closing.

This new research is no surprise to people in Cheboygan, who saw their hospital close, and reopen in 2012.

“As we approached 2012 it became obvious we were becoming a non-viable organization,” said Shari Shult, Vice President of Operations for McLaren Northern Michigan.

7 years ago, Cheboygan Memorial Hospital was struggling. 

The only hospital in the area was forced to close their doors.

“We started to see financial strain back in 2008 and trying to stay ahead of that in a rural environment was very difficult,” Shult said.

Shari Schult was the interim CEO of the hospital when it closed in April 2012

McLaren stepped in and purchased the hospital, reopening it just weeks later.

“They had a vision for us they knew healthcare was necessary, with their help, they saved healthcare in this community,” Shult said.

But other rural community hospitals continue to struggle.

New research from Navigant shows one in four rural hospitals in Michigan are at risk of closing.

“I think that rural hospitals and rural care centers try and do more to meet the needs of the community than they can financially sustain,” Shult said.

In Cheboygan, changing their focus has helped. Under McLaren, they no longer offer in-patient care, just emergency care and outpatient services.

A model that Schult says is working, and could help other struggling rural hospitals

“We wanted to be everything to everybody, but we couldn’t, and we can’t, but we want to be the best at what we’re doing and we deliver the best care for those services,” Shult said.

This study by Navigant looked at the financial state of not just rural hospitals in Michigan, but across the country.

It shows about 21% of rural hospitals across 43 states are at high risk of closing unless their financial situations improve.

That’s 430 hospitals total. In Michigan, 18 rural hospitals are at high financial risk. That’s a little more than a quarter of all rural hospitals in the state.

Navigant says there are a few reasons for these numbers.

First, economics. Rural areas have seen a loss of agricultural and manufacturing jobs.

Rural areas also tend to have populations that are either very old or very young and therefore, have more uninsured, Medicaid and Medicare patients.

That mix means rural hospitals are more likely to be left under compensated or completely uncompensated for care.

The study says rural hospitals are sometimes too big. The study shows the average rural hospital has 321 employees, but just 7 daily patients.

At the same time, 65% of these hospitals are considered essential to their communities. People in rural communities may also be more likely to skip a hospital visit since they are less likely to be able to afford the latest technology.