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Rural hospitals are vanishing from America’s landscape, leaving entire communities without critical healthcare access. With half of them now in financial distress, the question looms: who will care for rural America when these hospitals are gone? This urgent question lies at the heart of a new study by the Chartis Center for Rural Health, which details the unprecedented strain on rural healthcare as closures, financial pressures, and a shrinking workforce coalesce into a national crisis.
For over 15 years, rural hospitals have been fighting for survival. Now, with unrelenting pressures, declining reimbursement, and an aging, under-resourced patient population, the safety net for rural communities is fraying faster than ever.
Since 2010, Alabama has faced the closure of at least 14 hospitals, largely affecting rural areas. These closures have resulted from a mix of financial strain due to insufficient Medicare and Medicaid reimbursements, high uninsured rates, and the state’s decision not to expand Medicaid. This crisis has intensified healthcare accessibility issues, with hospitals like Randolph Medical Center, Hartselle Medical Center, and Cooper Green-Mercy ceasing inpatient and emergency services to reduce losses. Additionally, the closure of Thomasville Regional Medical Center in 2024 underscored the fragile state of rural healthcare, as it lost critical federal support following the COVID-19 pandemic.
The situation continues to deteriorate, with over a dozen more hospitals currently at risk. Alabama’s reluctance to expand Medicaid has amplified financial pressures, particularly in rural hospitals, as the additional funds could have alleviated some of these operational challenges. This trend in hospital closures leaves many residents facing prolonged travel times for emergency care and specialized services, significantly impacting maternal health and overall access to timely medical care across the state.
Key Findings
Rising Deficits: Today, 50 percent of rural hospitals operate in the red—a steep jump from 43 percent last year. This marks the largest annual rise in rural hospital deficits in over a decade, signaling an unsustainable trajectory if intervention isn’t made soon.
Financial Pressures on Independent Hospitals: Independent rural hospitals are hit the hardest, with 55 percent struggling to remain solvent, compared to 42 percent of system-affiliated hospitals. While system affiliation offers some financial stability, it’s far from a universal solution to the unique challenges rural providers face.
Medicare Advantage’s Growing Reach: Enrollment in Medicare Advantage—a private insurance alternative to traditional Medicare—has grown by 48 percent in rural areas, particularly in states like Alabama and Georgia. However, Medicare Advantage’s payment structures and administrative complexities often leave rural providers with lower reimbursements and more red tape, stretching already thin resources.
Escalating Closures and Reduced Access to Care
The study paints a troubling picture of rural healthcare, where closures and service reductions are accelerating at a critical pace.
Hospital Closures and Conversions: Since 2010, 167 rural hospitals have closed or transitioned to models that no longer offer inpatient care. Last year alone, 28 rural communities lost inpatient services, surpassing the previous high set in 2020, and leaving residents without essential emergency and inpatient care.
Loss of Chemotherapy Services: Access to chemotherapy is rapidly diminishing, leaving cancer patients in rural communities with few options for life-saving treatment. Between 2014 and 2022, 382 rural hospitals—nearly one in three—discontinued chemotherapy services. States like Texas, Alabama, and Mississippi have seen some of the largest losses, with nearly half of their rural hospitals halting chemotherapy services. This trend forces rural cancer patients to travel long distances, face higher costs, and experience delays in care, which can severely impact their prognosis and quality of life.
OB Services Decline: Obstetric services are another casualty, with 267 rural hospitals cutting OB care between 2011 and 2021. This reduction has a particularly harsh impact on states like West Virginia, Florida, and Pennsylvania, where over 40 percent of rural hospitals have ceased OB services, forcing women to travel further for essential prenatal and birth services.
Regional Variations and Medicaid Expansion Impacts
The study highlights stark regional disparities, with non-Medicaid expansion states facing greater financial instability among rural hospitals. Alabama, Florida, and Kansas have some of the highest rates of hospitals operating at a loss, with Alabama’s negative operating margins affecting 74 percent of its rural hospitals. By contrast, Medicaid expansion states have comparatively stronger financial stability within their rural healthcare systems, showing how policy choices can shape healthcare outcomes.
Why It Matters
This rural healthcare crisis extends far beyond rural boundaries. When communities lose their hospitals, it disrupts not only healthcare access but also local economies, as hospitals are often major employers. This crisis may eventually overflow into urban areas as more rural patients are forced to seek care in already overburdened city hospitals. The stability of healthcare nationwide is tied to the well-being of rural hospitals, making this a pressing issue for all Americans.
Medicare Advantage: A Mixed Blessing
Medicare Advantage’s growth in rural areas complicates the financial landscape for hospitals. In rural America, the popular program enrolls over 50 percent of Medicare-eligible patients in some states, including Alabama and Georgia. However, its reimbursement limitations and additional administrative requirements pose new challenges for providers who rely on the more straightforward, cost-based model of traditional Medicare.
Potential Solutions and Next Steps
With nearly 420 rural hospitals deemed vulnerable to closure, Chartis calls for urgent action. Proposed measures include reducing administrative burdens on Medicare Advantage claims, reconsidering Medicaid expansion policies, and amending regulations under the Rural Emergency Hospital designation, which could restore access to crucial services in rural areas.
“The data present a sobering reality: if systemic changes aren’t enacted soon, we may see even more rural communities left without essential healthcare services,” the report states, urging national and local leaders to take action. With targeted policies, increased funding, and strategic realignments, America’s rural healthcare network can find a path forward—one that ensures every community, regardless of location, has access to essential healthcare.
