Giving Compass' Take:

• Brian Alexander explains how fragile rural America's hospitals are and the implications for the health of rural communities. 

• How can funders help build more resilient rural health systems? 

• Learn how to make better investments in rural health. 

This is the story of a small-town, publicly-owned hospital that, after thriving for decades, is struggling and now in all likelihood about to be appended to a large regional health-care system. The tale of Berger Municipal Hospital is, like that of many sectors of the American economy, one defined by industrial consolidation and the costs that come with it.

Not only would Berger help improve the health of Circleville residents, but it was expected to be a sign of modern welfare that would attract business executives and workers. As was typical, Berger was owned and operated by the city, and then, a generation later, jointly by both the city and surrounding Pickaway County.  However, last November, Circleville’s voters chose another direction.   At the urging of city and county leaders, and Berger’s administrators, residents voted to allow local politicians and the hospital’s board to begin a process to turn Berger, one of the last publicly owned and operated hospitals in the state, into a nonprofit private corporation.

Hospitals have been struggling—especially independent public and/or nonprofit hospitals located in smaller cities and rural towns. Last year, for example, the National Rural Health Association, a nonprofit, estimated that 673 rural facilities (with a variety of ownership structures) were at risk of closure, out of over 2,000. And with the new tax legislation, and events like the merger of the drugstore chain CVS and the insurer Aetna, the turmoil looks to get worse.

The implications of those moves can be profound, as consolidation can hurt hospitals and the smaller cities and towns they’re located in. Not only are community hospitals vital to many places’ social fabric and image of themselves, but they are often the largest local employers now that manufacturing jobs have faded.

Small nonprofit or city-owned hospitals seem like public assets, like roads or a sewer system. But they’ve always been hybrids—part social-welfare organization, part business. “It is that contradiction, that health care is both a public service and a private profit center, that our system has never resolved,”

Beatrix Hoffman, a historian at Northern Illinois University and the author of Healthcare for Some: Rights and Rationing in the United States Since 1930, explains. “We’ve never had that moment every other country has had when they decided to have universal care. We haven’t, and so we have this contradiction continue.”

Read more about the struggle of rural hospitals in America by Brian Alexander at The Atlantic.