2023 Hospital Closures and Why.

In 2023, there have been reports of hospital closures, particularly in rural areas. A report from the Center for Healthcare Quality and Payment Reform (CHQPR) found that over 600 rural hospitals are at risk of closing in 2023[1]. These closures are primarily driven by persistent financial challenges related to patient services or depleted financial resources. Rural hospitals often face difficulties in maintaining financial viability due to factors such as lower patient volumes, higher uninsured populations, and limited access to specialty care.

The increasing expenses in the healthcare industry have also contributed to the closure of hospitals. Hospital expenses are expected to increase throughout 2022 and 2023, leading to a significant financial strain on healthcare institutions[2]. Rising labor expenses are a significant factor, as they are anticipated to increase by a substantial amount. These financial pressures can lead to bankruptcies and closures, especially for hospitals that are already facing financial difficulties.

In addition to financial challenges, there are other factors that contribute to hospital closures. For example, changes in healthcare delivery models and shifts in patient preferences towards outpatient and ambulatory care have impacted the demand for inpatient services, leading to the closure of some hospitals[4].

It's important to note that these closures can have significant consequences for patient access to care, particularly in rural areas where access to healthcare services is already limited. The closure of rural hospitals can result in longer travel distances for patients, delays in receiving timely care, and increased pressure on remaining healthcare facilities in the area[6].

HOSPITAL CLOSURES TO DATE:

Vancouver, Wash.-based PeaceHealth is taking initial steps to close its Eugene (Ore.) University District hospital as the system shifts operations to its RiverBend campus. PeaceHealth described the Eugene location as "underutilized." 

1. South City Hospital, a 178-bed facility in St. Louis, plans to close because of financial challenges. The 154-year-old hospital has been under receivership for the past few months. It began winding down the facility Aug. 4.

2. Martin General Hospital, a 49-bed facility in Williamston, N.C., suspended operations Aug. 3 and plans to file for bankruptcy. The hospital, which lost $13 million in 2022, cited financial challenges related to declining population and utilization trends as reasons for the decision.

3. Grand Rapids, Mich.-based Corewell Health will close its Lakeview, Mich.-based Spectrum Health Kelsey Hospital in October after a steady decline in admissions. In June, Corewell opened a $12 million care center a few minutes away from Spectrum Health Kelsey. 

4. Eastern Niagara Hospital in Lockport, N.Y., closed June 17 after years of financial turbulence. In November 2019, the hospital filed for Chapter 11 bankruptcy protection and signed a management agreement with Buffalo, N.Y.-based Catholic Health. The system had been planning to close Eastern Niagara Hospital once its replacement hospital opens. 

5. McLaren St. Luke's in Maumee, Ohio, closed May 8 and ceased all outpatient services. Cincinnati-based Mercy Health is acquiring the hospital campus, which includes 12 buildings, from Grand Blanc, Mich.-based McLaren Health Care. Mercy is working with WellCare Physicians Group practices through the transition to maintain the continuity of patient care. 

6. San Antonio-based Texas Vista Medical Center, part of Dallas-based Steward Health Care, closed May 1. The 325-bed hospital provided healthcare to predominantly lower income residents in San Antonio and South Texas for almost 40 years and had been struggling financially. The closure resulted in 827 layoffs. 

7. St. Margaret's Health-Peru (Ill.) closed Jan. 28 after the system's CEO and chair of the board detailed plans to temporarily shut the hospital and reopen it once a rural emergency hospital designation is finalized. However, the hospital will need to reopen before it can qualify for the designation.

In summary, the closure of hospitals in 2023 is driven by a combination of financial challenges, increasing healthcare expenses, changes in healthcare delivery models, and shifts in patient preferences. These closures can have a detrimental impact on patient access to care and highlight the ongoing challenges in the healthcare system.