Hundreds of rural hospitals are 'vulnerable to closure' and 46% operate in the red, new report finds

Many rural hospitals have dropped some type of
inpatient care to save money. (Adobe Stock photo)

Despite some limited improvements, the newest statistics on rural hospitals from healthcare advisory firm Chartis are startling. "The group’s latest report on the state of rural healthcare providers found that 46% of rural hospitals are operating at a loss while 432 hospitals are deemed 'vulnerable to closure,'" reports Dave Muoio for Fierce Healthcare. The 2024 report from Chartis "outlined 50% of rural hospitals operating in the red and 418 hospitals at risk of closure."

A rural hospital's median operating margin and Medicaid expansion status are among the factors Chartis used to determine financial health. "Nationwide median operating margin for rural hospitals currently sits at 1%, with 16 states having medians below 0%," Muoio writes. "In the 10 non-Medicaid expansion states, which hold 30% of all rural hospitals, 53% of rural hospitals [operate] in the red, with a median operating margin of -1.5%."

Rural hospitals that aren't in the red have often shuttered their obstetric units and shed inpatient care or other services to stay solvent. "Inpatient care access has ended across 182 rural communities since 2010, due to either closures or transitions," Muoio explains. "Between 2011 and 2023, 293 rural hospitals stopped offering obstetrics services. . . . A similar trend was evident regarding chemotherapy. . . from 2014 to 2023, 424 rural hospitals ended the service."

The report highlighted the "key hurdles for rural hospitals, such as a 2% Medicare reimbursement cut that 'will cost rural hospitals more than $509 million this year and result in over 8,000 jobs lost,'" Muoio reports. "Chartis’ dire national snapshot comes shortly after a Wipfli survey found sparks of optimism among rural healthcare organization leaders. . . .[But] some of their views may have already changed in light of recent weeks’ political developments."