So far in 2024, 11 hospitals and emergency departments have closed their doors permanently (1). Additionally, in 2023, at least 9 hospitals closed, 42 healthcare organizations closed certain services, and more than 700 hospitals stood on the brink of bankruptcy and closure (2, 3). Hospital closures in recent years have occurred at an unprecedented speed, especially in rural areas (4). Causes of this alarming trend include organizational financial stress and operational challenges (5). The consequent fallout has had and will continue to have devastating effects on patients and their communities (6).
Financial problems have been cited as the reason for most hospital closures in recent years (5). For example, in 2023, Texas’s St. Mark’s hospital closed due to its unpayable mortgage, and Missouri’s South City Hospital closed after multiple bankruptcy claims over the years (7). However, the most common financial factor relates to Medicaid, especially for hospitals in rural areas (8). These areas contain over 60 million Americans, 32% of whom were uninsured in 2019 (9). Many states have not participated in the Medicaid expansion, which means that hospitals do not get reimbursed for treating uninsured patients and instead incur losses, which can amount to devastating costs for smaller hospitals, given their already decreased operating margins (8). However, rural hospitals in Medicaid expansion states are 50% less likely to close, a point that experts have used to demonstrate that states should consider participating in Medicaid expansion (10). Outside of insurance-related stressors, both urban and rural hospitals have seen financial problems caused by property costs, losses incurred during COVID-19, and poor investments (5).
Operational challenges—specifically workforce issues—are another cause of the increase in recent hospital closures. Many hospitals face workforce shortages, as more than 20% of healthcare workers have left the field since 2021 (11). In addition to the shortage already caused by an aging workforce in some medical positions, employees, nurses, physicians, and others have reported increasing workplace dissatisfaction over the years due to pay decreases, stress, burnout and mental health problems, and healthcare organization decision-making, leading many to quit (12). In fact, the healthcare industry has been ranked last in employee satisfaction across 27 American industries (13). The costs and turmoil associated with workforce shortages have led to many hospitals being unable to keep services open (14).
Whether a hospital closes due to financial problems, operational challenges, or both, its impacts on patient communities are dire. In rural areas, former patients of closed hospitals face even less access to care and must travel farther to receive treatment, which incurs additional cost and may be associated with poorer outcomes (6). Many areas are left without providers or specialists, while many members of the community are left without jobs (15).
To prevent additional hospital closures, advocates have pushed the federal government in recent years to implement crucial healthcare changes. In 2024, the Biden administration expanded health coverage for low-income Americans, increased outreach to rural citizens, and created a program similar to Medicaid for patients in states that have not participated in Medicaid expansion (16). In addition, the CMS has also begun to provide supplementary funding to hospitals to keep them open and increase workforce training opportunities (16). These changes would help offset the costs associated with uninsured patients in both urban and rural hospitals, but healthcare organizations must also tackle their operational challenges in order to reduce workforce shortages and decrease costs. Without action, hospitals will continue to close, and patients across the country will suffer.
References
1: Ashley, M. 2024. “11 hospital closures in 2024.” Becker’s Hospital Review. URL: https://www.beckershospitalreview.com/finance/5-hospital-closures-in-2024.html.
2: Cass, A. 2023. “42 hospitals closing departments or ending services.” Becker’s Hospital Review. URL: https://www.beckershospitalreview.com/finance/10-hospitals-closing-departments-or-ending-services.html.
3: Harnett, K. 2024. “Inside a $300M push to save failing hospitals.” Modern Healthcare. URL: https://www.modernhealthcare.com/policy/california-hospital-closures-madera-community-hospital-distressed.
4: American Hospital Association. 2022. “AHA report: rural hospital closures threaten patient access to care.” American Hospital Association. URL: https://www.aha.org/news/headline/2022-09-08-aha-report-rural-hospital-closures-threaten-patient-access-care.
5: Hatton, R. 2024. “Why 4 hospitals are closing and what it means for ASCs.” Becker’s ASC Review. URL: https://www.beckersasc.com/asc-news/why-4-hospitals-are-closing-and-what-it-means-for-ascs.html.
6: Harsha, D. 2022. “How do hospital closures in the United States affect patient care?” Harvard Kennedy School. URL: https://www.hks.harvard.edu/faculty-research/policy-topics/health/how-do-hospital-closures-united-states-impact-patient-care.
7: Cass, A. 2023. “72 hospitals closing departments or ending services.” Becker’s Hospital Review. URL: https://www.beckershospitalreview.com/finance/61-hospitals-closing-departments-or-ending-services.html.
8: American Hospital Association. 2022. Rural hospital closures threaten access. American Hospital Association. URL: https://www.aha.org/system/files/media/file/2022/09/rural-hospital-closures-threaten-access-report.pdf.
9: Medicaid and CHIP Payment and Access Commission (MACPAC). 2021. Medicaid and rural health. MACPAC IssueBrief. URL: https://www.macpac.gov/wp-content/uploads/2021/04/Medicaid-and-Rural-Health.pdf.
10: Daley, J. 2018. “Hospitals in states that expanded Medicaid less likely to close.” National Public Radio Health News. URL: https://www.npr.org/sections/health-shots/2018/01/08/576448351/hospitals-in-states-that-expanded-medicaid-less-likely-to-close.
11: O’Connell-Domenech, A. 2023. “The US is suffering a healthcare worker shortage. Experts fear it will only get worse.” The Hill. URL: https://thehill.com/changing-america/well-being/prevention-cures/4225960-the-us-is-suffering-a-healthcare-worker-shortage-experts-fear-it-will-only-get-worse/.
12: Aiken, L., Lasater, K. and Sloane, D. 2023. Physician and nurse well-being and preferred interventions to address burnout in hospital practice. JAMA Health Forum, vol. 4(7). DOI: 10.1001/jamahealthforum.2023.1809.
13: Mensik, H. 2023. “Healthcare worker pay satisfaction lowest across all industries, study finds.” Healthcare Dive. URL: https://www.healthcaredive.com/news/healthcare-worker-pay-satisfaction-lowest-all-industries-Qualtrics/640859/.
14: American Hospital Association. 2022. Data brief: workforce issues remain at the forefront of pandemic-related challenges for hospitals. American Hospital Association. URL: https://www.aha.org/issue-brief/2022-01-25-data-brief-workforce-issues-remain-forefront-pandemic-related-challenges.
15: Holmes, G., Slifkin, R., Randolph, R. and Poley, S. 2006. The effect of rural hospital closures on community economic health. Health Services Research, vol. 41(2). DOI: 10.1111/j.1475-6773.2005.00497.x.
