One by one, rural hospitals in Florida are turning out the lights and going out of business.
In 2019, the Regional General Hospital closed down in Williston, population 3,089, forcing townspeople to drive 45 minutes to Gainesville or Ocala for care. In 2020 in Lake City, the Shands Lake Shore Regional Medical Center shut its doors forever. In 2022, the Healthmark Regional Medical Center went dark in the Panhandle town of DeFuniak Springs, population 6,535.
That’s three rural Florida hospitals gone in four years. In fact, more than 135 rural hospitals nationwide have closed since 2010, and more Florida hospitals might be following them.
Another eight rural hospitals in Florida are at risk of closing, and five of those are in danger of shutting down within two or three years, according to a new report from the Center for Healthcare Quality and Payment Reform (CHQPR), a national policy center focused on improving health care payment and delivery systems.
The report doesn’t name the specific hospitals. There are 27 rural hospitals in the state, according to the Florida Hospital Association.
More than 700 rural hospitals in the U.S. are at risk of closing due to low financial reserves, financial losses on patient care and limited sources of other revenue, the report said.
The financial struggles of rural hospitals remain a stubborn problem in the U.S. health care system. More than 100 rural hospitals have closed in the past decade. Dozens more have converted to rural emergency hospitals, cutting inpatient services to stay afloat with federal grants.
The biggest problem? “Private insurance plans are paying them less than what it costs to deliver services to patients,” the CHQPR report says. “Although the at-risk hospitals are losing money on uninsured patients and Medicaid patients, losses on private insurance patients are the biggest cause of overall losses. Conversely, many other rural hospitals are not at risk of closing because they make profits on patient services.”
The report spells out three more big problems for rural hospitals:
Low financial reserves: “The hospitals at greatest risk of closing have more debts than assets, or they do not have adequate net assets to offset losses on patient services for more than a few years.”
Financial losses on patient care: “The majority of 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.”
Not enough revenue from other sources: “Many hospitals have managed to remain open despite losses on patient services because they receive local tax revenues or state government grants. However, there is no guarantee that these funds will continue to be available in the future or that they will be sufficient to cover higher costs.”