Tessa Quinn
There are currently over 6,000 hospitals in the United States, but the number of rural hospitals is shrinking. Rural hospitals are defined as those not located within a metropolitan area designated by the U.S. Office of Management and Budget and the Census Bureau. In the past two decades, nearly 200 rural hospitals have closed, and over 700 more are at risk of closing. This is due to a variety of factors, including financial problems, inadequate payments from health insurance plans, and Republican healthcare cuts. These closures have a significant impact on rural communities, as they often result in a loss of access to healthcare and jobs, leading to financial insecurity.
| Characteristics | Values |
|---|---|
| Number of hospitals in the US | 6,093 |
| Number of rural hospitals at risk of closure | Over 300 |
| Number of rural hospitals closed in the past two decades | Nearly 200 |
| Number of rural hospitals at risk of closure in the near future | Over 700 |
| Number of rural hospitals that have stopped delivering babies in the past 5 years | Over 100 |
| Number of rural hospitals that still have labour and delivery services | Less than half |
| Number of rural hospitals closed since January 2005 | 196 |
| Number of rural hospitals with complete closures since January 2005 | 112 |
| Number of rural hospitals with converted closures since January 2005 | 84 |
| Number of rural hospitals closed since 2010 | 153 |
| Number of rural hospitals with complete closures since 2010 | 89 |
| Number of rural hospitals with converted closures since 2010 | 64 |
| Number of rural hospitals in 2023 | 50 fewer than in 2017 |
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What You'll Learn
There are over 300 rural hospitals at risk of closure
There are over 300 rural hospitals in the US at immediate risk of closure, according to the Center for Healthcare Quality and Payment Reform. This is part of a wider trend of rural hospital closures, with nearly 200 rural hospitals closing over the past two decades. The primary cause of these closures is inadequate payments from health insurance plans, which are not enough to sustain essential services in rural communities.
The impact of these closures is significant. With more than 60 million Americans living in rural areas, hospitals are essential lifelines, providing emergency and primary care, as well as obstetrics, mental health services, and long-term treatment. When a rural hospital closes, residents lose access to critical healthcare services, and the local economy suffers. Businesses may be hesitant to set up in areas without healthcare infrastructure, and existing businesses, such as farms, have to deal with the impact of having sicker workers.
Additionally, the closure of rural hospitals can lead to increased hospitalization rates and longer hospital stays for locals. This is because, by the time they seek healthcare, their health issues have often progressed. Rural patients are also more likely to be readmitted to a hospital after an initial stay, as they may not have easy access to follow-up care or services. The loss of rural hospitals can also contribute to broader community-level decline, impacting not just healthcare but also community economic growth and governance.
To address this crisis, various solutions have been proposed. One bill, the Rural Hospital Stabilization Act of 2025, aims to provide grants to rural hospitals to help with their financial situation. Other suggestions include focusing on preventative care, utilizing AI, and expanding job opportunities and economic improvements for rural residents. However, some proposed legislation, such as the One Big Beautiful Bill Act, could exacerbate the problem by slashing Medicaid spending in rural areas, further straining already vulnerable communities and healthcare systems.
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196 rural hospitals have closed since 2005
Since 2005, 196 rural hospitals have closed in the United States, with 81 shutting down completely and the remaining undergoing "conversion," meaning they stopped providing inpatient services but continued to offer outpatient care and emergency services. The financial strain is the main factor contributing to these closures, with smaller size, lower occupancy rates, and greater vulnerability to economic fluctuations compared to urban hospitals. The COVID-19 pandemic further exacerbated the financial challenges faced by rural hospitals, and as of June 2023, 35 rural hospitals had shut down since the pandemic's start.
The closure of these hospitals has had a significant impact on the communities they served, particularly in rural areas where residents are older, in poorer health, and have limited access to alternative healthcare services. The loss of these hospitals can result in longer travel distances to receive care, which has been associated with poorer health outcomes. Additionally, the denial by commercial insurers and the trend of "rural bypass," where patients opt for larger hospitals instead of their local rural hospitals, further contribute to the challenges faced by these healthcare institutions.
To address the crisis, the Federal Government has provided financial support through programs such as the USDA's Community Facilities Program, which has been shown to increase the probability of survival for hospitals that receive this funding. However, current federal programs are insufficient to resolve the issues facing small rural hospitals, and proposed changes may exacerbate the problems. Rural hospitals require adequate payments and an improved payment system to sustain essential healthcare services for their communities.
The University of North Carolina's Cecil G. Sheps Center for Health Services Research data reveals that a total of 195 rural hospitals have shut down since 2005, including 100 complete closures and 95 facilities no longer providing inpatient care. This crisis in rural healthcare highlights the urgent need for solutions to ensure access to essential healthcare services for millions of Americans living in these underserved communities.
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Financial problems are a leading cause of rural hospital closures
Nearly 200 rural hospitals have closed in the United States over the past two decades, and over 700 more—a third of all rural hospitals in the country—are at risk of closing soon. This is primarily due to financial problems. Even if community members have insurance, the payments from health insurance plans are often inadequate to sustain essential services in rural communities.
Rural hospitals typically serve smaller populations with a higher proportion of uninsured and underinsured patients, leading to significant financial strain. This situation is exacerbated by the fact that rural populations tend to be older and sicker, requiring more intensive and costly care. The COVID-19 pandemic has also contributed to financial instability, as hospitals had to reduce money-making procedures and increase spending on personal protective equipment and other pandemic-related services.
Compensation by private payers remains low at rural hospitals across the country. For example, the Thomasville hospital in Alabama closed due to financial difficulties. The hospital could not afford to stay open, and the owners filed for bankruptcy. This had a detrimental impact on the local economy, as businesses are reluctant to open in areas without healthcare facilities. Additionally, existing businesses that cannot relocate, such as farms, have to cope with sicker workers.
Healthcare policies, particularly those related to Medicaid and the Affordable Care Act, significantly influence the financial viability of rural hospitals. States that have expanded Medicaid, such as Montana, have experienced a decrease in the rate of rural hospital closures. However, recent eligibility changes have resulted in the disenrollment of thousands of Montanans from Medicaid. Without sufficient Medicaid funding, hospitals will continue to face financial challenges, increasing the risk of closures.
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Rural hospitals are often the largest employers in their communities
Rural hospitals in the United States are facing a crisis, with many already closing down and others at risk of imminent closure. Since January 2005, there have been 196 rural hospital closures and conversions, with 112 complete closures and 84 converted closures. This is due to a multitude of factors, including financial problems, inadequate payments from health insurance plans, and proposed changes to federal programs.
The financial challenges faced by rural hospitals have caught the attention of lawmakers, who have expressed concern about the impact of healthcare cuts on these hospitals and the communities they serve. In a letter to the Sheps Center director in June 2025, lawmakers inquired about the impact of the House-passed budget reconciliation bill on rural hospitals, particularly those treating the highest share of Medicaid recipients or facing financial distress.
The situation is critical, with over 300 rural hospitals across the US at risk of closure, conversion, or service reduction due to the proposed Republican healthcare cuts. These cuts include slashing funding for Medicaid and the Affordable Care Act by more than $1 trillion and Medicare by over $500 billion. The impact of these cuts could be devastating for rural communities, exacerbating the existing challenges faced by rural hospitals and threatening their survival.
It is clear that rural hospitals play a vital role in their communities, not just as healthcare providers but also as major employers. Their closure or reduction in services can have far-reaching consequences, affecting access to healthcare, employment opportunities, and the financial stability of rural residents.
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A converted closure occurs when a hospital ceases inpatient services
There are 6,093 hospitals in the United States, and nearly 200 rural hospitals have closed over the past two decades. A converted closure occurs when a hospital ceases inpatient services but continues to provide other healthcare services, such as urgent or emergent care, rehabilitation, outpatient services, primary care, skilled nursing care, or long-term care. In some cases, a hospital may dramatically reduce its inpatient services and would still be considered "open" as long as it continues to provide inpatient services, even if in a vastly reduced capacity.
Rural hospitals are facing a crisis, with over 700 at risk of closing in the near future. This is due in part to inadequate payments from health insurance plans, which are insufficient to sustain essential services in these communities. Additionally, the expanding variety of outpatient care options is reducing the need for inpatient services, leading to facility closures. Advances in medical research and technology are making procedures less invasive and allowing for better and quicker patient recovery at home. As a result, inpatient hospital stays are decreasing, and rural hospitals are struggling to adapt.
The process of rural hospital closure and its impact on revenue cycle functions are not well understood. When a hospital closure occurs, it is essential to notify community members and relevant organizations through a press release. This ensures that patients know where to find alternative services, how to settle outstanding bills, and how to obtain copies of their medical records.
The definition of a rural hospital varies, but generally, these hospitals are not located within metropolitan areas as designated by the U.S. Office of Management and Budget and the Census Bureau. They serve as critical access points for healthcare in their communities, and their closure can have significant economic effects on the surrounding areas.
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Frequently asked questions
There are 6,093 hospitals in the United States as of 2023.
Over 300 rural hospitals are at disproportionate risk of closure, conversion, or service reduction. In 2023, there were 50 fewer rural hospitals than in 2017.
Since January 2005, there have been 196 rural hospital closures and conversions, with 112 complete closures and 84 converted closures. In the past two decades, nearly 200 rural hospitals have closed, and over 700 more are at risk of closing in the near future.
