Rural Hospitals Face Growing Financial Strain

Community and rural hospitals—constituting the majority of the nation’s 6,100 hospitals—are confronting severe financial pressures that threaten their continued operation. An October 2026 report from the American Hospital Association notes that over 40 percent of rural hospitals operate at a loss, and since 2010 more than 150 have closed or converted, while obstetric services and chemotherapy offerings have been cut at hundreds of facilities.

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Their role extends beyond medical treatment, linking isolated communities to larger health networks. Recent federal policy changes affecting Medicaid and insurance coverage under the One Big Beautiful Bill Act are expected to add further strain to already thin margins.

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• 5,121 community hospitals and 1,797 rural hospitals comprise the U.S. hospital landscape.

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• Since 2010, >150 rural hospitals have closed or converted.

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• 331 rural facilities have eliminated obstetric services; 448 no longer provide chemotherapy.

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• Sandhills Medical in South Carolina treats ~12,000 patients annually, with 85 percent living at or below 200 percent of the federal poverty line and 65 percent uninsured or on Medicaid.

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• 42 percent of Sandhills patients manage hypertension; 21 percent manage diabetes.

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Joan Kelly emphasizes that hospital closures affect more than travel distance, potentially discouraging people from seeking care, delaying treatment, and weakening community resilience. Amanda Duke highlights transportation barriers, noting that without reliable cars, a clinic 30 minutes away can feel inaccessible. Both executives call for a re-evaluation of which services must remain local, the expansion of virtual care, and partnerships that allow specialty expertise to be shared while preserving the local workforce.

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• “In many rural and regional communities, the local hospital is simultaneously a place of care, an employer, an economic anchor, an emergency resource and often the connective tissue between patients and the broader health care system,” — Joan Kelly, CEO of Caidir

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• “In rural America, the first question isn’t which system is best. It’s whether anyone is close enough to reach.... Without a reliable car, a clinic 30 minutes away might as well be on the moon,” — Amanda Duke, CEO of Sandhills Medical in South Carolina

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• “When services disappear or a hospital closes, the impact isn’t simply that a patient has to drive farther. It can change whether people seek care at all, delay treatment, disrupt families and caregivers, and weaken the community’s overall resilience,” — Joan Kelly, CEO of Caidir

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