_{(Photo credit: Brown University.)}

More than 100 rural hospitals have closed over the past decade, according to the Center for Healthcare Quality & Payment Reform. They also report that 40 additional hospitals have eliminated in-patient services since the beginning of 2023. But now 700 more — one-third of all rural hospitals in the country — are at risk of closing because of serious financial problems. More than 300 are at immediate risk of closing. Just in our home state of Minnesota, there are currently 97 rural in-patient hospitals that are open, but 20 of those are at risk of closing (21%), and 9 are at immediate risk.

What’s behind the financial issues at these hospitals? Ongoing losses, inadequate payments from Medicare and Medicaid, and insufficient financial reserves to cover the losses. These financial challenges force hospitals to lose money on critical services and may lead to reduced services or closure, forcing residents to travel longer distances for essential care.

Many rural hospitals have operated at a financial loss for multiple years, with inadequate revenues to cover expenses. And they lack sufficient net assets to withstand financial losses over time. On top of that, low reimbursement rates from commercial, Medicare, and Medicaid plans are insufficient to cover their increasing costs of providing care. And the coming cuts to Medicaid could further increase the risk of closure for many rural hospitals, as these communities often have a high reliance on Medicaid.

The downside for patients is, of course, reduced access to care. The closure of a rural hospital leaves the community without nearby access to essential services, such as emergency-room care. Residents are forced to travel longer distances for inpatient and emergency care, which can be critical in life-or-death situations. In addition, hospitals at risk of closing may reduce or eliminate certain service lines, such as mental health, further limiting available care options for residents.

We at Timmaron Group have much experience in community care — since 2008 — and that includes working with tribal and rural communities exclusively. If your community is impacted with a real or potential hospital closing, reach out to us to see how we can help. We’re all about creative solutions. Just email us at hi@timmarongroup.com.