Report: A Third of Rural Hospitals at Risk of Closing

September 22, 2025

A third of U.S. rural hospitals are at risk of closing due to serious financial concerns, according to a recent report from the Center for Healthcare Quality and Payment Reform.

Nearly every state in the U.S. has rural hospitals at risk of closure, and about 40 percent of those facilities are at immediate risk, per the report. In Pennsylvania, 17 hospitals are at risk of closing (34%) and nine are at immediate risk of closing in the next two or three years (18%).

“Action is needed immediately to prevent more rural hospital closures,” the report notes.

The center’s analysis is based on the latest hospital cost reports submitted to CMS. The analysis identifies two distinct tiers of rural hospital vulnerability: those at risk of closure and those facing an immediate risk of closure, the report states.

Here are the key takeaways:

• Cause of concern:  Nearly 760 rural hospitals in in the U.S. are at risk of closure due to financial problems.
  • The report evaluates whether hospitals have adequate financial reserves to cover losses on patient services over time.
  • In over half the states, 25 percent or more of rural hospitals face this risk, with 10 states having most of their rural hospitals in jeopardy, the report states.
• Immediate risk: The report also analyzes hospitals facing immediate threat of closure, meaning financial reserves could offset losses on patient services for two to three years at most.
  • Currently, 322 rural hospitals are at immediate risk of shutting down due to severe financial difficulties.
• The cost of closing:  More than 100 U.S. rural hospitals have closed over the past decade.
  • These facilities play a vital role, connecting communities with emergency care and preventing long travel times for care and specialty services in other regions.
• Payor challenges:  Almost half of the rural hospitals in the country lose money delivering patient services. It costs more to deliver health care in small rural communities than in urban areas, and many health insurance plans do not pay enough to cover these costs, the report notes.
• Quotable:  “In addition, rural hospital closures threaten the nation’s food supply and energy production, because farms, ranches, mines, drilling sites, wind farms, and solar energy facilities are located primarily in rural areas, and they will not be able to attract and retain workers if health care isn’t available in the community,” the report notes.

HAP continues to highlight the need to support Pennsylvania’s rural hospitals. Earlier this month, HAP provided detailed recommendations to state leaders outlining how they can help rural hospitals through the new Rural Health Transformation Program included in the federal reconciliation bill.

Read the Center for Healthcare Quality and Payment Reform’s rural analysis online.