How Many Rural S.C. Hospitals are at Risk for Closure?

Seven hundred rural hospitals across the U.S., or about one-third of all rural facilities in the country, are at risk of closing due to severe financial challenges, according to a July 21 Center for Healthcare Quality and Payment Reform analysis.

The analysis comprises 264 hospitals that are at immediate risk of closure, according to the report. In almost every state, rural hospitals are at risk of closure. In most states, more than 25% of rural hospitals are at risk and in 11 states, 50% or more are at risk.

The latest data is a slight decrease from CHQPR’s May analysis, which found 720 hospitals were at risk of closure with 294 at immediate risk. 

More than 100 rural U.S. hospitals have closed in the past decade, with 110 closing since 2015, according to the report. Fifty-three hospitals have ended inpatient services since the beginning of 2023 to qualify for federal grants only available to rural emergency hospitals.

The analysis also found that more than 40% of the country’s rural hospitals lose money providing patient services. Nearly one-third of rural hospitals lost money overall in 2024 and 2025 now that the special federal assistance from the pandemic has ended.

Underpayment by health insurance plans is another driver for rural hospital losses. The analysis found that about half of the services provided at an average rural hospital go to privately insured patients, meaning the amount paid by private plans, not Medicare or Medicaid, determines if a rural hospital will lose money. 

It would cost about $5 billion annually to increase payments enough to prevent at-risk hospital closures, the analysis said. 

“In order to preserve and strengthen essential hospital services in rural communities, small rural hospitals need to receive Standby Capacity Payments from both private and public payers in addition to being paid Service-Based Fees when individual services are delivered,” the analysis said. “The Standby Capacity Payment would support the fixed costs of essential services at the hospital, and the Service-Based Fees would cover the variable costs of those services.”

For the state-by-state breakdowns, see the full article here.