The Health Affairs study found that rural hospitals were outperformed by urban hospitals in median margin, median occupancy rate, and median change markup.
Over a six year-period, median overall profit margins declined for all rural hospital types except for critical access hospitals (CAH), according to a Health Affairs study released Monday afternoon.
Nonprofit CAHs saw median overall profit margins rise between 2.5% to 3.2% from 2011 to 2017, while all other rural hospitals experienced declines ranging from 0.4% to 5.7% over the same period.
Hospitals that closed during the study period posted a negative average overall profit margin of 3.2% in the final year of operations.
The study, which analyzed data from the Centers for Medicare & Medicaid Services, found rural hospitals were also outperformed by urban hospitals in median margin, median occupancy rate, and median change markup.
Related: Coronavirus Threatens Rural Hospitals Already at the Financial Brink
The Health Affairs study was the latest evidence that rural hospitals have faced significant financial pressures in recent years, even before the emergence of coronavirus disease 2019 (COVID-19).
As of 2017, more than 80% of rural hospitals were nonprofit institutions; 48% were classified as CAHs, 35% were non-CAHs, while 13% were for-profit non-CAHs, and 4% were for-profit CAHs.
Related: Coronavirus Was Slow to Spread to Rural America. Not Anymore.
Additionally, the study concluded that rural hospitals were in a worse financial position in 2017 than in 2010, noting the amplified struggle by provider organizations in states that did not expand Medicaid as part of the Affordable Care Act.
"Policy makers interested in balancing access to care in rural communities, the efficiency of care delivery, and the financial viability of rural hospitals should consider the trade-offs
identified in this study and compare the incremental cost of providing various essential services between hospitals and other settings, such as emergency care," the study's researchers wrote. "Finally, the cost-effectiveness of allowing strategic rural reclassification should be examined by federal regulators."
Related: Coronavirus Could Deliver Blow to Struggling Rural Hospitals
The study was released almost two months after a Guidehouse analysis found that one quarter of rural hospitals are at high risk of closing due to financial challenges.
More than 350 rural hospitals, accounting for $8.3 billion in total patient revenue, are at the greatest financial risk of closure, according to Guidehouse.
The firm conducted its research prior to the start of the pandemic but stated in the report that the outbreak is "likely to worsen the overall situation."
Related: A Quarter of Rural Hospitals at 'High Risk' of Closure, COVID-19 Likely to Make it Worse
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.