Urban hospitals are closing as often as rural hospitals, data shows

Urban hospitals are closing at nearly the same rate as rural hospitals, new research from Harvard found.

Rural hospital closures have been an issue in the US for decades. Following the passage of the One Big Beautiful Bill Act (OBBBA), concerns over closures grew due to a provision that lowers state Medicaid funding by an estimated $665 billion between 2025 and 2034. Many rural hospitals depend on Medicaid funding to stay open.

As part of the reconciliation process for the OBBBA, Congress created the Rural Health Transformation Program to ease concerns. However, experts say the program won’t do enough to offset the scale of Medicaid cuts, as it allocates just $50 billion and much of that money won’t go directly to hospitals.

However, whether rural hospitals close more often than urban hospitals hasn’t been studied much, according to the researchers from Harvard’s T.H. Chan School of Public Health.

In a research letter published in JAMA on Oct. 8, they found that from 2010 to 2025, nationwide hospital closures increased by 4% year over year, while openings decreased 3% YoY. There was no significant difference in closure rates among rural hospitals compared to urban hospitals.

“Many policymakers have been treating hospital closures as a rural problem, but our data show it’s a national problem,” Thomas Tsai, associate professor in the Department of Health Policy and Management at Harvard University and corresponding author of the research letter, said in a statement.

Other findings include:

• Of nearly 5,000 hospitals observed in the study, a total of 432 hospitals closed between 2010 and 2025. Of those, 230 were urban and 202 were rural, with 315 hospitals shutting completely and 117 keeping outpatient services.
• A total of 216 hospitals opened during the same time frame.
• There was a net loss of 216 hospitals and 24,399 beds.

Digging into details. The rate at which for-profit hospitals closed was more than triple the rate nonprofit hospitals closed. Of the hospitals studied, ones that most frequently closed included safety-net (13.7%), non-teaching (12.1%), and smaller hospitals (12.4% of hospitals with 24 or fewer beds), the researchers found.

Both urban and rural closures most commonly took place in “socially vulnerable” counties and non-Medicaid expansion states. The hospitals that opened were more often in urban areas (6.8% of openings vs. 1.8% in rural areas) and were smaller for-profit facilities. Few safety-net hospitals (nine) or those serving a large Medicaid population (19) opened. 

The researchers used data from the American Hospital Association’s annual survey of hospital closures and openings.

“Hospitals of all sorts are facing serious challenges with the impending Medicaid policy changes, in addition to the recent expiration of the enhanced premium tax credits,” Ben Teicher, spokesperson for the AHA, said in a statement shared with Healthcare Brew. “That will impact hospitals in a variety of ways, including increasing the risk of closure.”

Since the findings suggest that urban hospitals are almost just as likely to close as rural hospitals, Tsai added that “we must shift away from only asking ourselves how we can save rural hospitals and start asking: How do we protect access to hospital care for vulnerable communities, wherever they are?”