Medicaid Expansion is Critical to Rural Prosperity

By Sheldon Weisgrau | March 5, 2020

Rural hospitals are in crisis. Over the past decade, 120 rural hospitals across the United States have closed. 2019 was the worst year yet, with 19 closures, including two in Kansas. Five rural Kansas hospitals have closed since 2010.

The loss of local health care services may be the most obvious effect of a hospital closure, but it is not the only impact. Hospitals are among the largest employers in their communities and serve as local economic engines, creating jobs and attracting and supporting businesses and residents. In addition to compromising the health of the local population, a hospital closure causes job loss, a decline in economic activity, and a loss of vibrancy and quality of life in rural communities. Research shows that hospital closure in a small town results in a decline of more than $700 per year in per capita income.

The Chartis Group, a respected health research and consulting firm, recently released its periodic report on rural hospitals and the findings weren’t reassuring. Kansas hospitals are in particular trouble – Chartis concluded that 31 Kansas hospitals, nearly a third of all the rural hospitals in the state, were vulnerable to closure. Only Texas, a state nearly ten times the size of Kansas, had more vulnerable rural hospitals. Of these vulnerable Kansas hospitals, 12 were considered to be at greatest risk of closure. Again, Kansas ranked among the national “leaders” on this measure.

There are many factors that impact a hospital’s risk of closure. Rural populations are older, poorer, and sicker than their urban and suburban counterparts. These and other factors, such as the mix of hospital services provided, whether the hospital is part of a larger system, and occupancy rate, are largely beyond the control of lawmakers. One key element, however, is squarely within the capacity of legislators to change: a state’s Medicaid expansion status.

Chartis identified the lack of Medicaid expansion as a key predictor of rural hospital closure. Location in a Medicaid expansion state was found to decrease the likelihood of closure by 62 percent. Conversely, all of the states with the highest number of closures and the most vulnerable and at-risk hospitals are states that have not expanded Medicaid.

Medicaid expansion is not a panacea for all the troubles facing rural communities and the rural health system. But the evidence is clear and convincing – expansion enhances insurance coverage, reduces uncompensated care, and improves hospital revenue. Hospitals in expansion states are far less likely to close.

It is time for the Kansas legislature to expand KanCare. The survival of many of our rural hospitals and their communities depend on it.

Sheldon Weisgrau is the Alliance for a Healthy Kansas’ Senior Policy Advisor. Contact Sheldon at