OVERVIEW OF RURAL HOSPITALS IN CALIFORNIA

The following information was released by the California Department of Health Care Access and Information (HCAI):

Introduction#

Rural residents often face significant challenges obtaining healthcare, including high costs for insurance, shortages of medical providers, long distances to travel for care (over three-fourths of California's rural census tracts are in primary care shortage areas), and inadequate connectivity that interferes with telehealth. Population differences can amplify these access challenges, as rural residents tend to be older and experience more serious health conditions.

Rural healthcare facilities face challenges too, among them dependence on public funding, difficulties recruiting and retaining an adequate workforce, and financial challenges including risks of closure. The July 2025, H.R.1 Reconciliation Bill included $50 billion nationally over five years for the Rural Health Transformation Program (RHTP), through which California received $233.6 million for the first program year. The California's Rural Health Transformation Program (CalRHT), is a statewide strategy to strengthen access, quality, and sustainability across rural and frontier communities to improve health outcomes. The plan envisions a connected, resilient rural health system that delivers person-centered care through a skilled workforce, modernized infrastructure, and locally responsive partnerships.

To examine the role, capacity, and contributions of rural hospitals and to inform understanding of the potential consequences of theanticipatedcuts to coverage and funding this data brief compares rural and urban hospitals with general acute care licenses1 across a range of measures.The analysis uses the Federal Office of Rural Health Policy (FORHP) designations of rural. See the "How HCAI Created This Product" section below for details on the assignment of rural status.

Key Findings#

Rural areas in California account for 82% of the land area, and are home to 7% of the population and 17% of the hospitals in the state.

The 2.7 million Californians residing in rural areas exceed the total population of 16 states.

Of the 60 rural hospitals, 35 are designated as Critical Access Hospitals maximum of 25 acute care beds and located at least 35 miles from the nearest hospital 2 (Hospital counts reflect hospital and FORHP rural definitions detailed below). Rural hospitals play a vital role in delivery of emergency services.

59 of 60 rural hospitals provided emergency services 3. Of these, 33 had a "Basic" emergency license level indicating that a physician was onsite 24/7 and 26 had a "Standby" license indicating that a physician was on call 24/7.

Rural hospitals delivered 1.0 million emergency department (ED) visits in 2024, about 7% of all ED visits statewide (in line with the 7% of Californians residing in rural areas).

Rural areas have fewer acute care hospital beds: there are 1.0 acute care hospital beds per 1,000 people in rural areas, compared to 1.8 in urban areas.

Long term care (LTC) and other non-acute bed types make up nearly half (45%) of the licensed care beds in rural general acute hospitals, compared to 15% in urban facilities.

Rural hospitals are smaller, with an average of 81 licensed beds per hospital vs. 264 in urban areas. If limiting this comparison to general acute care beds, rural hospitals have an average of 44 beds vs. 225 in urban areas.

Rural hospitals play an important role in births; 27 hospitals provide maternity services with over 11,000 babies born in rural hospitals in 2024.

Rural hospitals accounted for 3% of births statewide; but women residing in rural areas delivered 7% of the babies statewide4, suggesting many women travel to urban areas to deliver5

Some 45% of rural hospitals provide maternity services, compared to 59% of urban hospitals.

C-Section rates in rural (31%) and urban (32%) hospitals were similar.

Vaginal Births After Cesarean (VBAC) rates are much lower in rural areas (4.3%) compared to urban areas (17.6%), based on HCAI discharge data.

Rural hospitals rely more heavily on government revenues. Medicare provides 31% of rural net patient revenues and Medi-Cal provides 33%, totaling 64% compared to 55% in urban hospitals.

32% of hospitals statewide report negative net income, with 33% of urban hospitals and 25% of rural hospitals. This includes 99 urban hospitals, 15 rural hospitals, and 114 hospitals statewide. Rural hospitals show an average operating margin of 3.3%, with urban hospitals at 2.8%, while net income margins are at 8% for rural, 7% for urban, and 7% statewide.

Visualization#

HCAI publishes a number of visualizations that allow for a deeper exploration of HCAI data and rural health, such as:

Hospital Financial Health

Physician Supply and Preventable Hospitalizations by County, 2023.

Patient Characteristics by County and Facility HCAI

Additional visualizations that highlight data for specific rural geographies can be found on HCAI's Data and Reports page.

Critical Access Hospital (CAH) is a designation given to eligible rural hospitals by the Centers for Medicare and Medicaid Services (CMS). (The two CAHs classified as urban by the FORHP rural designations were Community Memorial Hospital Ojai and Healdsburg Hospital.)

Notes: For measures described as "Share of All", rural and urban shares will total to 100%. For measures described as "Percentage of xx", these are specific to the rural or urban columns; for example, "Percentage of Hospitals that Provided ED Services" means that 98% of rural hospitals provided ED services and 81% of urban hospitals did. Emergency Department (ED) visits include both those resulting in admission and not resulting in admission; they do not include as visits patients who left the ED without being seen or those who scheduled clinic visits in the ED locale. Population reflects U.S. Census Bureau, American Community Survey 5-Year Estimates, 2024, Table B01003 (Total Population), Table B01001 (Age/Sex), and B13002 (Women Who Had a Birth in the Past 12 Months), 2024, with Federal Office of Rural Health Policy rural and urban designations applied at the census tract level.

*Net income margin is net income divided by the sum of all revenue, multiplied by 100

**Operating margin is operating revenue (net patient revenue and other operating revenue) minus operating expense, divided by the sum of all operating revenue, multiplied by 100.

Access Underlying Data

How HCAI Created This Product#

This product was created using HCAI Hospital Annual Financial Data: Selected Data and Pivot Tables (2024 Pivot Table Hospital Annual Selected File (October 2025 Extract)) and Hospital Utilization Data(2024 Hospital Annual Utilization (October 2025)), based on facility-level information that hospitals and hospital systems are required to report to HCAI. The hospital financial select data pivot file was filtered to select facilities licensed as general acute care hospitals; this defined the universe of facilities in this brief.

General acute care hospitals, which are licensed by the California Department of Public Health, may include surgical and rehab hospitals, long-term acute care, children's and cancer hospitals. Hospital financial data reporting is at a consolidated level, meaning more than one campus operating under the same license may be combined. Continuous measures (e.g., ED visits) from the facility-level utilization data files were aggregated to match the consolidated level of financial reporting. One rural facility (AHMC Seton Coastside) reported with its urban affiliate and therefore could not contribute to the rural totals in this brief.

Population counts of rural and urban are based on the FORHP rural/urban census tract designations, applied to the 2024 United States Census American Community Survey population, 5-year estimates (Tables B01003, B01001, B13002).

Researchers and policymakers use various definitions of rural. This data brief uses the FORHP definition of rural. The definition is applied using the FORHP "County and Census Tract Excel file" to designate California hospitals as rural or urban based on their location (census tract).

Glossary#

Payer Categories

Payers are the companies, programs, and organizations that oversee insurance plans and reimburse healthcare providers. Payer categories used in this report are based on the standard regulatory definitions used in Hospital Annual Financial Data reporting, sourced from theHCAI Accounting and Reporting Manual for California Hospitals.

County and Other Indigent Programs: Programs that cover indigent patients under Welfare and Institutions Code Section 17000, those funded in whole or in part by County Medical Services Program (CMSP), California Health Care for Indigents Program (CHIP) and/or Realignment Funds, and other programs that covers care for indigent patients. Includes fee-for-service and managed care programs. This is a combination of the "County Indigent Programs Traditional," "County Indigent Programs Managed Care," and "Other Indigent" payer categories in the Hospital Annual Financial Data (HAFD).

Medi-Cal: A public health insurance program that provides free or low-cost medical services and healthcare benefits to low-income individuals, financed from state and federal funds; California's version of Medicaid. Includes Medi-Cal Fee-for-Service (FFS) and Medi-Cal Managed Care . This is a combination of the "Medi-Cal Traditional" and "Medi-Cal Managed Care" categories in the HAFD.

Medicare: A federal health insurance program funded by the Centers for Medicare and Medicaid Services (CMS) under the Social Security Amendments of 1965 that provides healthcare benefits to those aged 65 years and over and to disabled beneficiaries of any age. Includes Traditional Medicare (Medicare Fee-for-Service) and Medicare Advantage. This is a combination of the "Medicare Traditional" and "Medicare Managed Care" categories in the HAFD.

Commercial and Other Third-Party: This payer categorycalled Other Third Party in the Hospital Annual Financial Dataincludes product types for which the coverage premium is paid by a private entity or other third-party payer. It encompasses payers such as employers, Workers' Compensation and Short-Doyle. Both fee-for-service and managed care products are included. This is a combination of the "Other Third Parties Traditional" and "Other Third Parties Managed Care" categories in the HAFD.

Other: Includes all payers who do not belong in any of the other categories, including uninsured patients and self-paid patients.

Additional Information#

Topic: Cost Transparency/Healthcare Utilization

Source Link:Cost Transparency Hospital Financials

Citation: HCAI Overview of Rural Hospitals in California 2024

Temporal Coverage: 2024

Spatial/Geographic Coverage: Statewide, Rural/Non-Rural

Frequency: Annually

Footnotes#

1 Hospitals licensed as general acute care may have some licensed beds not classified as acute care, including long term care, chemical dependency, rehabilitation, and psychiatric beds.

2Critical Access Hospital (CAH) is a designation given to eligible rural hospitals by the Centers for Medicare and Medicaid Services (CMS); criteria for this designation generally include: have 25 or fewer general acute care beds and are more than 35 miles from the closest hospital and provide emergency care services 24/7. Note that in 2025, Glenn Medical Center lost its CAH status and the federal funding that accompanied it, closing in September 2025 due to financial pressures. Despite restoration of CAH status, the hospital had not re-opened as of April 2026.

3The one rural facility that did not provide emergency services in 2024 was a specialized facility for the developmentally disabled (Porterville State Hospital).

4 US Census, ACS 5-Year Estimates, 2024, Table B13002, Women Who Had a Birth in the Past 12 Months, analyzed at census tract level for rural and urban residence status (using FORHP rural designations).

5Rural hospitals are well represented on the HCAI Maternity Care Honor Roll (exceeding the statewide percentage of maternity hospitals on the honor roll in 2025); see the honor roll for hospital specifics.