By The Epoch Times | Created at 2026-10-16 16:11:28 | Updated at 2026-10-16 16:53:54
48 minutes ago
Hospitals have been closing at an increasing rate over the last 15 years, and many of those that remain are operating at a loss.
One out of 11 hospitals was shuttered between 2010 and 2015, while only one new hospital opened for every two that closed. At the same time, more than 40 percent of hospitals that remain are running in the red.
Rural and urban safety-net hospitals fared the worst, according to a recent study of thousands of hospitals.
Here’s what we know, based on a spate of recent reports on the state of the health care industry.
A Nationwide Problem
Rural and urban hospitals were equally likely to close, according to the study of 5,000 hospitals published in the Journal of the American Medical Association.
About 9 percent of urban hospitals closed, and about 8 percent of rural hospitals did. Rural hospitals were less likely to be replaced. Only about 2 in 100 new hospitals opened in rural areas, compared with seven in urban areas.
Safety-net hospitals, which serve a large proportion of low-income and Medicaid patients, closed more often and rarely opened. About 1 in 7 safety-net hospitals closed during the last 15 years. Just 1 in 100 new hospitals served safety-net populations.
The new hospitals were usually small, urban, and for-profit, according to the study.
Many policymakers have treated hospital closures as a rural problem, but it’s really a national problem, Thomas Tsai, associate professor at Harvard TH Chan School and an author of the study, wrote on Oct. 8.
Rural Hospitals Struggle
Closures are only part of the story, according to an Oct. 13 statement by the American Hospital Association. A sizable number of existing hospitals are financially distressed.
Over 40 percent of rural hospitals operate at negative margins, according to a February report from Chartis, a healthcare consulting company.
The hospital association attributed this to low patient volumes, workforce shortages, geographic isolation, and funding cuts and financial pressures from Medicare Advantage.
Medicare and Medicaid cover about 72 percent of hospital stays but pay less than the cost of care, the American Hospital Association reported. Medicare underpaid rural hospitals by over $7 billion in 2024, and this figure was 26 percent higher than in 2020, the report stated.
Medicare Advantage plans paid rural hospitals 91 percent of the rates paid by traditional Medicare, amounting to over $1 billion in underpayment in 2024, according to the association’s findings.
Also, 70 percent of rural areas face a shortage of health care workers, with an average of only 30 doctors per 100,000 people. That’s 1 in 9 of the workforce available in urban areas.
Urban Hospitals Also Hit
Urban hospitals face challenges of their own, according to an August study.
About 43 percent of hospitals operate at a loss, up from 33 percent before the COVID-19 era, according to consulting group Kaufman Hall. That’s about 45 percent of urban hospitals running on a deficit.
Other factors are driving the closure of urban hospitals, reported the Government Accountability Office (GAO), which studied five urban hospitals that closed in the last five years.
Aging facilities that require costly repairs, a low or declining number of patients, poor management, and the challenges associated with operating an independent hospital—without the support of a multi-hospital system—and split ownership of the hospital and its real estate among multiple companies also contributed to the closure of urban hospitals over the last five years, according to the GAO.
Tsai said there is no simple solution to the problem.
“We must shift away from only asking ourselves how we can save rural hospitals, and start asking: How do we protect access to hospital care for vulnerable communities, wherever they are?” he wrote.
Lawrence Wilson contributed to this report.
