By Elaina Myers, Assistant Editor

Rural hospital closures remain one of the most significant challenges facing healthcare delivery in the United States. According to a 2026 report from the Center for Healthcare Quality and Payment Reform (CHQPR), more than 100 rural hospitals have closed over the past decade, leaving millions of residents without local access to emergency, inpatient and other essential healthcare services.  

The report estimates that more than 700 rural hospitals — roughly one-third of all rural hospitals nationwide — are currently at risk of closure, with nearly 300 considered at immediate risk due to severe financial distress. The five states with the highest number of rural hospitals at risk of closing are Texas (84), Kansas (69), Oklahoma (45), Mississippi (34) and Arkansas (31). Three primary factors drive this vulnerability: ongoing losses on patient services, insufficient supplemental revenue from grants or local funding and limited financial reserves.  

With fewer patients and lower reimbursement rates, nearly half of rural hospitals operate on negative or near-negative margins, according to the Commonwealth Fund. As a result, a disproportionate share of rural hospital revenue is spent simply maintaining operations rather than investing in facility upgrades and infrastructure improvements. These funding shortfalls often force hospitals to defer maintenance and delay modernization efforts. The visible effects of deferred maintenance can undermine community confidence and make it more difficult to attract patients, physicians and other healthcare professionals. 

While many policy discussions focus on government payment programs, CHQPR found that approximately half of services provided by the average rural hospital are delivered to privately insured patients. Hospitals most at risk of closure are frequently receiving payments from private insurers that do not cover the actual care cost.  

The study outlines two immediate solutions. 

First, payment rates from both public and private health plans should be sufficient to cover the true cost of delivering services in rural communities. Small rural hospitals face higher per-patient costs because they must maintain critical services such as emergency departments and inpatient units despite serving smaller populations. CHQPR recommends requiring Medicare Advantage plans to reimburse rural hospitals at least at the level of traditional Medicare and encouraging employers and communities to select health plans that adequately support local healthcare providers.  

Second, the report recommends implementing Standby Capacity Payments. Unlike traditional fee-for-service reimbursement, these payments would help cover the fixed costs associated with maintaining essential services, including staffing emergency and inpatient care around the clock. Service-based payments would continue to cover variable costs, while standby payments would support the infrastructure needed to ensure care is available when patients need it.  

Elaina Myers is the assistant editor of the facilities market. She has covered various topics from pest management to resilience to sustainability and is the beat writer for special days. She also runs the FacilitiesNet social media accounts.