Over the past decade or more, demographic and economic pressures have drastically changed the healthcare landscape in rural communities across the United States. Long-term out-migration toward more urban areas has shifted the population in many rural areas to become smaller and older, making it more difficult for rural hospitals to cover operating expenses, with fewer patients to support the fixed and variable costs associated with expensive hospital care. Older populations tend to have higher health care needs, often requiring more intensive services and a wider range of specialty care, which can be difficult to support in rural areas.

Between 2013 to 2020, approximately 103 (about 5%) of the 2,322 short-term rural acute care hospitals in the U.S. closed.1 With the acceleration of rural hospital closures across the country, Federally Qualified Health Centers (FQHCs) that serve these rural communities play an instrumental role in preserving access to care. Located in all 50 states and territories, the 606 rural FQHCs across America operate 5,054 sites and serve more than 9.1 million patients, or one in five rural residents.2 At the median, rural FQHCs served 9,665 patients through more than 37,000 visits, employed 77 full-time equivalent (FTE) staff members, and generated $11.3 million in annual revenues.

Capital Link’s recently-released study on health center capital needs indicates that health centers nationally will require $17.5 billion in capital investments over the next five years, and the rural “share” of that need is $5.25 billion. Through the American Rescue Plan Act (ARPA), health centers will shortly be receiving $1 billion in federal capital grants toward their capital needs, of which $392 million is slated for centers serving rural communities. While this is an important down-payment on their capital needs, a sizable gap of almost $4.9 billion remains. Without the necessary capital funding to close this gap, rural health centers across the country will be unable to invest in the facilities necessary to sufficiently support their aging and high-risk patient communities in the years to come, while also counteracting the loss of health system capacity in areas where their services are most needed.   

How can social investors help?

  1. Support a rural FQHC’s capital campaign, leveraging the federal investment to assist the center to add capacity and services that benefit rural communities;
  2. Invest in Capital Link’s growth planning activities for rural communities, linking health centers and other community assets to build capacity at the local level;
  3. Contribute to a rural investment fund managed by Capital Link’s financing affiliate, Community Health Center Capital Fund; this fund could be used to support individual health center projects, while leveraging funds from multiple other sources to develop a larger pool of resources and a sustainable mechanism for raising capital for rural health centers across the country.

For more information, access our rural resources on our website here.

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1. Freeman, V.A., et al (March 2015). The 21st Century Rural Hospital: A Chart Book. The Cecil B. Sheps Center for Health Services Research at the University of North Carolina, https://www.shepscenter.unc.edu/wp-content/uploads/2015/02/21stCenturyRuralHospitalsChartBook.pdf, p.7
2. All data on rural FQHCs in this article is sourced from the Health Resources and Services Administration’s Uniform Data System database and from Financial and Operating Trends of Rural Federally Qualified Health Centers, 2016 – 2019, Capital Link, 2021.