New Report: Financial Strain on Rural Hospitals May Affect Access to Care

February 20, 2025

The financial challenges of rural hospitals may have significant implications for health care access in rural areas, according to a new report by the Pennsylvania Health Care Cost Containment Council (PHC4).

PHC4’s Special Report on the Financial Health of Pennsylvania Rural Hospitals, Fiscal Year 2023, provides data for 64 general acute care hospitals located in rural counties. During fiscal year (FY) 2023, 48 percent of those hospitals operated at a loss.

“As rural hospitals close or reduce services due to financial pressures, residents of these areas may face longer travel times to access care, reduced availability of emergency services, and a potential general decline in the quality of health or health care services,” said Barry D. Buckingham, PHC4 executive director.

Among the report’s key takeaways:

• Decreased reimbursements:  Lower payments from government programs like Medicare and Medicaid, as well as private insurers, are pressuring rural hospitals’ finances.  
• Aging population:  Aging populations in rural communities often require more complex and expensive care.  
• Hospital volume:  Rural hospitals often serve smaller populations, making it difficult to generate enough revenue to cover costs.  
• Higher operating costs:  Rural hospitals may face higher operating costs due to factors such as transportation challenges, workforce shortages, and the need to maintain specialized services. 

PHC4’s report is available to review online. Learn more about our priorities to support rural health.