Rural hospitals have had to scale back services amid staffing shortages, exacerbating longstanding access and equity issues, a new report shows.

Around half of 130 rural hospital executives said they had to suspend services or consider it due to nursing shortages, an October survey from the Chartis Center for Rural Health found. Prior to the COVID-19 pandemic, hundreds of rural hospitals cut obstetrics and chemotherapy services to stay afloat.

Nearly 200 rural hospitals stopped providing obstetrics care from 2011 to 2019, while close to 300 rural hospitals dropped chemotherapy treatment from 2014 to 2020, Chartis data show. That trend explains, in part, why Black and Latino Americans living in rural areas are more likely to die prematurely or experience poverty, particularly among children, according to the report.

“One of our biggest concerns is the erosion of general services across the rural hospital landscape,” said Michael Topchik, national leader for Chartis, adding that cutting obstetrics care often has a cascading effect. “The vast majority of healthcare professional shortage areas are in rural areas, and what we are hearing now is that nurses are leaving their rural hospital to make more money as travel nurses—pandemic burnout was also huge.”

While cash bonuses helped Guadalupe County Hospital in Santa Rosa, New Mexico retain nurses during the pandemic, many of the small hospitals across the state have had to close inpatient wards or limit outpatient services due to nursing shortages, hospital administrator Christina Campos said.

“They have seen an exodus of staff nurses to staffing agencies,” she said. “We’re one person away from a crisis since we’re so tiny and staffed thinly—I’m constantly holding my breath.”

The COVID-19 relief funds have provided a buffer. But those only temporarily mask persistent problems, observers warn.

Rural hospitals received more than $12 billion in financial aid through the advanced payment program and Provider Relief Fund grants, according to Chartis. Of this aggregate, rural and community hospitals received a median of $9.1 million through the early phases of the Coronavirus Aid, Relief, and Economic Security Act, while critical-access hospitals received $4.1 million.

Still, around 40% of rural hospitals operate in the red, down from 46% pe-pandemic, according to the Chartis analysis, noting that hospitals in Medicaid expansion states have fared better than those in non-expansion states.

“The CARES Act has helped rural providers address these problems, but the problems still exist,” said Lyndean Brick, CEO of the healthcare consultancy Advis. “We are starting to see gaps in service delivery widen due to the pandemic. If you closed a chemotherapy program and referred a patient somewhere else, some can’t go.”

That’s why state and federal lawmakers are turning to other legislation and policy tweaks to shore up rural providers.

Critical-access and rural hospitals with fewer than 50 beds can convert to the new Rural Emergency Hospital status. It aims to buoy rural hospitals with very low inpatient volumes by replacing all their inpatient care with outpatient services. Starting in 2023, those hospitals would receive a Medicare outpatient rate that is 5% higher than what full-service hospitals receive, in addition to monthly facility payments.

The pandemic has likely made that program more attractiveexperts said.

“The Rural Emergency Hospital status is gaining some traction,” said Sarah Gaskell, associate director at Guidehouse. “If inpatient cases are declining, rural hospitals have another option now with a different reimbursement structure.”

The Rural Emergency Hospital designation could solve the low occupancy rates and high operating costs of critical-access hospitals while also preserving access to care, said Ge Bai, an accounting professor at Johns Hopkins University.

In addition to that program, allowing nurse practitioners and physician assistants to work in rural areas without satisfying federal minimum personnel qualifications and loosening telehealth site-of-service laws could help stabilize rural hospitals, Bai said.

The current approach is unsustainable considering the financial constraints faced by the Medicare program, she warned.

“Given the low population density in rural areas, it is unrealistic to expect rural residents to have the same convenient access to large hospitals and experienced clinicians as urban residents,” Bai said. “Public and policymakers should understand this limitation and focus on using limited financial resources to achieve broad access to primary care, emergency care and emergency transportation in rural areas.”

Meanwhile, the Medicare sequester will incrementally restart in April. The 2% cut to all Medicare payments will dent rural hospital revenues by nearly $230 million, Chartis estimated.