A new policy brief from researchers at the RUPRI Center for Rural Health Policy Analysis in the University of Iowa College of Public Health finds that rural nursing homes faced significant workforce shortages, financial pressures, and occupancy losses in the years following the COVID-19 pandemic.

Examining trends from 2017 to 2022, the study compared staffing, resident health, occupancy, closures, mortality, and financial performance among nursing homes in small and isolated rural communities, micropolitan areas, and metropolitan regions. The findings show that facilities across all geographic areas experienced declines in certified nursing assistant (CNA) and licensed practical nurse (LPN) staffing, while registered nurse (RN) staffing increased during the study period.

Researchers also found that residents of rural nursing homes were more likely to experience depression and other behavioral health conditions than residents of urban facilities, highlighting the importance of mental health services and support in rural long-term care settings.

According to Hari Sharma, associate professor of health management and policy at the University of Iowa and the paper’s principal investigator, staffing hours per resident day have increased in recent years in both urban and rural areas.

“Rural communities, however, continue to face greater challenges in recruiting and retaining nurses and CNAs because of labor market and resource constraints,” Sharma says. “At the same time, rural nursing homes continue to face high staffing needs related to residents’ mental and behavioral health needs.”

Rural nursing homes faced particularly significant pressures during and after the pandemic. Facilities in small and isolated rural communities experienced higher overall and COVID-19-related mortality rates, steeper declines in occupancy, and slower recoveries than their metropolitan counterparts. Although occupancy rates rose slightly in 2022, they remained well below pre-pandemic levels, contributing to ongoing financial strain.

The study also found that rural nursing homes were more likely to close than facilities in larger communities. Between 2017 and 2022, 10.3% of nursing homes in small or isolated rural towns closed, compared with 7.9% in micropolitan communities and 8.5% in metropolitan areas.

At the same time, profit margins, particularly those associated with patient care services, declined substantially across the sector, raising concerns about the long-term sustainability of rural nursing home care.

“Many nursing homes have closed, particularly in rural areas, even as occupancy among the remaining facilities has increased in recent years,” Sharma says. “But rural nursing homes have much lower occupancy rates and a less favorable payer mix compared with urban nursing homes, creating financial pressures that could threaten access to care. We need to think creatively about maintaining access, including moving beyond large nursing homes toward smaller, home- and community-based settings.”

The findings suggest that rural nursing homes continue to face interconnected challenges related to workforce shortages, greater reliance on Medicaid, financial instability, and residents’ behavioral health needs. The authors note that targeted policy strategies, including investments in workforce development, telehealth, rural health infrastructure, and financial stabilization, could help strengthen long-term care services and preserve access for rural residents.

Gulrukh Mehboob, Keith Mueller, and Fred Ullrich of the University of Iowa Department of Health Management and Policy co-authored the paper.

This project was supported by the Federal Office of Rural Health Policy, Health Resources and Services Administration, U.S. Department of Health and Human Services, under cooperative agreement/grant U1C RH20419.