In 2016, the North Carolina Rural Health Research Program developed and utilized the Financial Distress Index (FDI) model to identify hospitals at high risk of financial distress and assess trends in varying risk of financial distress over time to help inform strategies to prevent or mitigate the effects of closures. We found the proportion of rural hospitals predicted to be at high risk of financial distress increased over time, with the largest increases in the South and Northeast census regions and for Medicare Dependent Hospitals and Rural Referral Centers. In 2017, we decided to examine communities served by rural hospitals based on their prediction of financial distress. We found that rural hospitals predicted to be at high risk of financial distress serve a more vulnerable population than those predicted to not be at high risk of financial distress. The purpose of this brief is to use updated results from the FDI to describe the communities served by rural hospitals at their predicted financial distress risk levels in 2019.

The FDI model assigns rural hospitals to high, mid-high, mid-low or low risk levels for a given year using Medicare cost report and Nielsen-Claritas data summed to market areas from two previous years. Using data from 2017, this brief, Characteristics of Communities Served by Rural Hospitals Predicted to be at High Risk of Financial Distress in 2019, updates and describes the characteristics of communities served by rural hospital predicted to be at high risk of financial distress in 2019.

Nationally, rural hospitals predicted to be at high risk of financial distress serve communities that have statistically significant higher percentages of non-Whites and Blacks in particular; lower rates of high school graduation; higher rates of unemployment; and worse health status as measured by percentage of fair or poor self-rated health, obese adults, tobacco using adults, and number of premature deaths. Regionally, rural hospitals predicted to be at high risk of financial distress serve communities with statistically significant:

• Higher rates of unemployment and worse health status as measured by percentage of obese adults and number of premature deaths in the South.
• Higher percentages of non-Whites and worse health status as measured by percentage of self-rated health of fair or poor, tobacco using adults, and number of premature deaths in the Midwest.
• Higher number of premature deaths in the Northeast.
• Higher percentages of non-Whites and lower rates of high school graduation in the West.