More than 500 rural hospitals–25% of the medical systems serving America’s sparsely populated areas–are at an immediate risk of closing because of their fragile financial situations, the Center for Healthcare Quality and Payment Reform reports.
Only four states–Delaware, Massachusetts, New Jersey and Rhode Island–did not have a hospital on the list. Tennessee, Alabama and Connecticut had the highest percentages of hospitals on the list, with Kansas, Mississippi and Texas having the most providers at risk.
The risks of these hospitals closing transcend the coronavirus pandemic, as the calculation is based on the financial situation of these hospitals was dire prior to 2020. Their situations may have been exacerbated by the loss of revenue resulting from canceled or delayed services due to the pandemic.
Hospitals are deemed “at immediate risk of closure” if they have a three-year pattern of negative total margin in revenues and they have insufficient financial reserves to support their long-term sustainability.
More than 300 other hospitals are “at risk of closure,” meaning they have had a profitable year within the three-year time frame, but they do not have sufficient financial reserves or they had significant financial support from non-revenue sources such as taxpayer support, grants or research income.
In total, nearly 900 hospitals are at risk of closure.