Rural Hospitals Owned By Investors More Likely To Close Amid Financial Hardship, Report Finds

A disproportionate share of the rural hospitals that have closed in the last five years were owned by for-profit companies, including some based in Nashville, according to a new Government Accountability Office report.

James Cosgrove, the lead researcher, says 64 rural hospitals closed in the last five years, twice as many compared to the five years prior.

“They were disproportionately occuring in the South, and also, the type of hospital mattered,” Cosgove said
on a GAO podcast. “We found, for example, that for-profit rural hospitals were more likely to close, relative to government-owned or not-for-profit rural hospitals.”

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Almost all of the facilities were in financial distress, but the report pointed to older studies that found investor-owned hospitals are more likely to respond to dwindling profit margins.

Rural hospitals have struggled as the population shrinks in many small towns and more care can be delivered in outpatient settings or via telemedicine. The recent surge of closures is also timed with changes in how hospitals are reimbursed for treating uninsured patients.

The closures are concentrated in states that did not expand Medicaid, with the biggest numbers in Texas and Tennessee.