The Early Experience of Rural Emergency Hospitals

In January 2023, the Rural Emergency Hospital (REH) designation was established to reinforce access to outpatient medical services in areas that may not be able to sustain a full-service hospital. Early evidence from rural hospital leaders and communities suggests that converting to REH helps avoid closure while providing short-term financial stability. Existing peer-reviewed literature on REHs focuses primarily on (a) examining what types of hospitals are likely to convert to REH and (b) benefits and challenges associated with conversion to REH. However, due to the recency of the REH designation and associated data lag, empirical analysis of the types of hospitals that have applied to become REHs and the impact of conversion to REH on profitability have yet to appear in peer-reviewed literature.

The objective of this study is to quantitatively determine (a) the organizational and financial characteristics of hospitals that have converted to REH and (b) the impact of conversion on financial stability.

Using 2022-2025 Medicare Cost Report data on all REHs and hospitals eligible for conversion to REH from the September 2025 release of data from the CMS' Healthcare Cost Report Information System (HCRIS) we will construct a dataset that contains data on each of 17 characteristics for the 30 REH converters and 2,141 non-converters as of January 1, 2025.