From Becker’s Financial Management
Rural hospital closures picked up in 2023 and nearly 700 rural hospitals face continued risk of closing due to serious financial challenges, with some states facing critical conditions in the short term.
The finding comes from the Center for Healthcare Quality and Payment Reform’s latest report, “Rural Hospitals at Risk of Closing.” Eight rural hospitals closed in 2023, as many as in 2022 and 2021 combined, according to the report. This followed a landmark 18 rural hospital closures in 2020, more than any year in the previous decade.
Based on the latest hospital financial information released by CMS in April 2024, CHQPR analyzes rural hospitals’ financial vulnerability in two ways: risk of closure and immediate risk of closure.
For the first category, there are hospitals at risk of closure in nearly every state. This is partly measured by financial reserve limitations that cannot offset hospital losses on patient services for more than six to seven years. In more than half of states, 25% or more of the rural hospitals are at risk of closing; in eight states, the majority of rural hospitals are at risk.
Immediate risk of closure is partly measured by tougher financial reserve limitations: those that could offset hospital losses on patient services two to three years at most. Over 300 rural hospitals are at immediate risk of closing because of the severity of their financial problems, with nearly half of rural hospitals in New York and Alabama facing such an outlook.
Given that immediate risk of closure is the more urgent of the two categories, Becker’s has ranked 25 states by the percentage of their rural hospitals at risk of closure in the next two to three years maximum. The listing for each state also contains broader information about the number of hospitals at risk of closure over the next six to seven years. The report from CHQPR assessing each state’s rural hospital health and risks can be found in full here.
New York
45% of rural hospitals — 23 — are at immediate risk of closure in the next 2-3 years
57% of rural hospitals — 29 — are at risk of closure in the next 6-7 years
Alabama
44% of rural hospitals — 23 — are at immediate risk of closure in the next 2-3 years
58% of rural hospitals — 30 — are at risk of closure in the next 6-7 years
Mississippi
34% of rural hospitals — 25 — are at immediate risk of closure in the next 2-3 years
52% of rural hospitals — 38 — are at risk of closure in the next 6-7 years
Connecticut
33% of rural hospitals — 1 — are at immediate risk of closure in the next 2-3 years
67% of rural hospitals — 2 — are at risk of closure in the next 6-7 years
Tennessee
31% of rural hospitals — 17 — are at immediate risk of closure in the next 2-3 years
35% of rural hospitals — 19 — are at risk of closure in the next 6-7 years
Vermont
31% of rural hospitals — 4 — are at immediate risk of closure in the next 2-3 years
62% of rural hospitals — 8 — are at risk of closure in the next 6-7 years
Oklahoma
29% of rural hospitals — 23 — are at immediate risk of closure in the next 2-3 years
43% of rural hospitals — 34 — are at risk of closure in the next 6-7 years
Arkansas
29% of rural hospitals — 14 — are at immediate risk of closure in the next 2-3 years
53% of rural hospitals — 26 — are at risk of closure in the next 6-7 years
Maine
28% of rural hospitals — 7 — are at immediate risk of closure in the next 2-3 years
44% of rural hospitals — 11 — are at risk of closure in the next 6-7 years
Virginia
27% of rural hospitals — 8 — are at immediate risk of closure in the next 2-3 years
30% of rural hospitals — 9 — are at risk of closure in the next 6-7 years
Kansas
26% of rural hospitals — 26 — are at immediate risk of closure in the next 2-3 years
56% of rural hospitals — 57 — are at risk of closure in the next 6-7 years
Florida
24% of rural hospitals — 5 — are at immediate risk of closure in the next 2-3 years
38% of rural hospitals — 8 — are at risk of closure in the next 6-7 years
Nevada
23% of rural hospitals — 3 — are at immediate risk of closure in the next 2-3 years
38% of rural hospitals — 5 — are at risk of closure in the next 6-7 years
New Mexico
21% of rural hospitals — 6 — are at immediate risk of closure in the next 2-3 years
25% of rural hospitals — 7 — are at risk of closure in the next 6-7 years
West Virginia
21% of rural hospitals — 6 — are at immediate risk of closure in the next 2-3 years
36% of rural hospitals — 10 — are at risk of closure in the next 6-7 years
South Carolina
20% of rural hospitals — 5 — are at immediate risk of closure in the next 2-3 years
40% of rural hospitals — 10 — are at risk of closure in the next 6-7 years
Massachusetts
20% of rural hospitals — 1 — are at immediate risk of closure in the next 2-3 years
40% of rural hospitals — 2 — are at risk of closure in the next 6-7 years
Texas
18% of rural hospitals — 29 — are at immediate risk of closure in the next 2-3 years
48% of rural hospitals — 77 — are at risk of closure in the next 6-7 years
California
18% of rural hospitals — 10 — are at immediate risk of closure in the next 2-3 years
32% of rural hospitals — 18 — are at risk of closure in the next 6-7 years
Louisiana
17% of rural hospitals — 9 — are at immediate risk of closure in the next 2-3 years
44% of rural hospitals — 23 — are at risk of closure in the next 6-7 years
Pennsylvania
17% of rural hospitals — 7 — are at immediate risk of closure in the next 2-3 years
32% of rural hospitals — 13 — are at risk of closure in the next 6-7 years
Missouri
16% of rural hospitals — 9 — are at immediate risk of closure in the next 2-3 years
38% of rural hospitals — 21 — are at risk of closure in the next 6-7 years
Georgia
15% of rural hospitals — 10 — are at immediate risk of closure in the next 2-3 years
32% of rural hospitals — 22 — are at risk of closure in the next 6-7 years
Colorado
12% of rural hospitals — 5 — are at immediate risk of closure in the next 2-3 years
21% of rural hospitals — 9 — are at risk of closure in the next 6-7 years
Alaska
12% of rural hospitals — 2 — are at immediate risk of closure in the next 2-3 years
18% of rural hospitals — 3 — are at risk of closure in the next 6-7 years