Rural hospitals across the United States are under significant financial pressure, with over 700 facilities—31% of the nation’s rural hospitals—facing potential closure, according to a recent report by the Center for Healthcare Quality & Payment Reform. Alarmingly, 360 of these hospitals, representing 16% of all rural hospitals, are at immediate risk.
The report highlights a nationwide issue, with nearly every state seeing rural hospitals on the brink. In nine states, half or more of their rural hospitals could close, including Kansas (63%), New York (56%), Texas (50%), Oklahoma (50%), Mississippi (52%), and Alabama (54%). With 80 hospitals at risk, Texas leads in potential closures, but Kansas surpasses Texas in the number of hospitals at immediate risk (31 versus 30).
A critical factor in these financial woes is that many rural hospitals are losing money on patient care due to insufficient insurer reimbursements. The report emphasizes that losses from private insurance patients are the most significant contributor to financial difficulties, compounded by inadequate government reimbursements. Additionally, rural hospitals typically have lower reserves to weather financial crises.
Recent closures underscore the severity of the situation. In Wisconsin, citing Workforce constraints and local market challenges, the Hospital Sisters Health System shut down Sacred Heart Hospital in Eau Claire and St. Joseph’s Hospital in Chippewa Falls, both of which had served their communities since the late 1800s. In Iowa, MercyOne announced the upcoming closure of Primghar Medical Center in September.
Erik Swanson, senior vice president at Kaufman Hall, acknowledges the struggles of rural hospitals but notes some positive signs, such as volume stabilization, which is crucial for small rural hospitals. However, he cautions that these hospitals remain in a challenging position.
The strain on rural healthcare extends beyond finances. As larger systems acquire rural hospitals, services are increasingly concentrated in urban centers, leading to longer travel times for patients needing specialized care. This shift burdens patients and their families, as highlighted by Jay Anders, MD, chief medical officer for Medicomp Systems.
In an op-ed, former Pennsylvania Gov. Tom Corbett stressed the need to expand and strengthen hospital care in rural areas, noting that many rural hospitals in Pennsylvania have already cut essential services like labor and delivery.
Some rural hospitals have resorted to unusual measures to stay afloat. The Bucktail Medical Center in central Pennsylvania launched a GoFundMe campaign last year, raising over $114,000 to keep its doors open. While the hospital remains operational, it had to close its long-term care facility in May.
According to the Chartis Center for Rural Health, rural hospitals face dire financial challenges, with half losing money. More than 130 rural hospitals have closed since 2010, and many remaining reduced services to survive. Staffing shortages, already a nationwide issue, are particularly acute in rural areas, affecting doctors, nurses, respiratory techs, and other essential workers.
According to the Center for Healthcare Quality & Payment Reform, a federal investment of an additional $5 billion—just one-tenth of 1% of national healthcare spending—could prevent the closure of vulnerable rural hospitals.
