The headlines tell the story:
“National report lists almost 20% of rural Arkansas hospitals at ‘immediate risk of closing‘”
“Report: Roughly 1 in 5 rural Virginia hospitals at risk of closure”
“Report: 12 Tennessee rural hospitals at ‘immediate risk’ for closure”
“Rural Nebraska Dialysis Unit Closes Despite the State’s $219M in Rural Health Funding”
“700 rural hospitals at risk of closing, by state”
Rural hospitals already on the brink
The 2020 census showed one in five Americans live in rural areas. In general, the residents there are older, in poorer health, and have less insurance coverage than the rest of the country, or no coverage at all. In the seven years before the last census, 4% of rural hospitals closed, leaving their communities without local emergency services, maternity wards, and other essential health care services.
One analysis shows that, between 2010 and 2025, 182 rural hospitals closed and 46% of rural hospitals had a negative operating margin.
In other words, rural hospitals were already struggling when Trump and congressional Republicans passed the so-called “One Big Beautiful Bill Act” (OBBBA). When Trump signed it into law in the summer of 2025, it cut $137 billion in Medicaid dollars from rural areas over ten years and replaced it with a one-time infusion of $50 billion through the Rural Health Transformation Fund (RHTF.)
Trump calls the RHTF “largest ever investment in rural healthcare,” HHS Secretary Robert F. Kennedy Jr. has called it “the biggest infusion of federal dollars into rural health care in American history,” and Centers for Medicare and Medicaid Services Administrator Mehmet Oz called it the “biggest investment, the most ambitious investment, in rural health care ever.” With a straight face, they say this while asking us to ignore the fact that the OBBBA represents an $87 billion cut to rural health care. They also fail to mention that it will throw over 10 million Americans off their health insurance while cutting taxes by $5 trillion, mostly benefiting the country’s wealthiest people.
Rural residents face monumental health care disparities
In a piece titled, “The Crisis in Rural Health Care”, the University of Kansas Medical Center has a depressing list of ways in which rural residents are impacted by health care disparities. For example:
Rural death rates are higher for both men and women.
The suicide rate is significantly higher in rural areas particularly among adult men and children.
Hypertension is more common in rural areas.
Only one-third of all motor vehicle accidents occur in rural areas but two-thirds of the deaths attributed to these accidents occur on rural roads.
While 25% of the U.S. population lives in rural areas, only 10% of U.S. physicians work in those areas.
There are only 40.1 specialists per 100,000 people in rural areas versus 134.1 in urban areas.
20% of rural communities lack mental health services compared to 5% of metropolitan counties.
Because the care they need is not locally available, rural patients often turn to telehealth. However, that is often not an option, either. The USDA estimates that over 22% of Americans in rural areas lacked access to the broadband internet services that are needed for telehealth services.
The “beating heart” of their communities
Not only do rural hospitals provide essential services to their surrounding communities, they’re also a bedrock institution that touches people in other ways:
Hospitals are often one of the largest employers in rural communities. They provide stable, high-paying jobs and support local economies through purchasing, construction, and partnerships with small businesses. When a rural hospital closes, it triggers a ripple effect—leading to job losses, business closures, and population decline. [...]
The National Rural Health Association calls them “the beating heart of a local economy”:
A hospital is often the centerpiece of economic viability in rural America, providing jobs for a community’s residents and resources for its development. The positive impact of a thriving hospital starts at the heart of nearby towns and stretches across many miles, providing a vital boost to families and local businesses in the surrounding region. Nationwide, hospitals support more than 16 million total jobs, including 5.7 million direct jobs in health care and 10.3 million ripple-effect jobs, according to the American Hospital Association’s January 2017 report on the economic contributions of hospitals. The report estimates that every dollar spent by a hospital supports $2.30 of additional business activity. For rural communities, the link between hospitals and the local economy is even more pronounced, often due to the absence of other large employers.
The impacts of the massive cut to rural health care are quickly being felt
Thanks to the OBBBA, hospitals are already closing. For example, in Wisconsin, Hospital Sisters Health System and Prevea announced a “complete exit” from Western Wisconsin in January, which included closing two hospitals and 19 clinics. CNN reports about a hospital in Georgia:
St. Mary’s Sacred Heart Hospital in rural Lavonia, Georgia, closed its labor and delivery unit, as well as its obstetrics and gynecology center, last fall. Expectant mothers now must drive about 30 minutes to the nearest hospital with labor and delivery services or about an hour to St. Mary’s hospital in Athens, which still operates a maternity ward.
In rural Nebraska, a hospital closed its dialysis unit in March despite the state receiving $219 million from the RHTF. Seven of Virginia’s 36 rural hospitals either face an immediate closure risk or are at high risk of experiencing financial distress, according to one report.
These are examples of the 700 rural hospitals – one-third of all rural hospitals in the country – that one study found to be currently at risk of closing because of the serious financial problems they are experiencing. When they close, rural residents lose access to vital services like emergency care, prenatal and maternity care, oncology care, and inpatient care – medical or psychiatric care that requires an overnight stay in a hospital or specialized treatment facility.
In addition, patients are forced to travel much farther for the care they need, even to emergency departments. The General Accounting Office found that when a rural hospital closes, patients have to travel nearly 24 miles for inpatient care. In urban areas, they travel just over three miles.
Republicans take no blame, have no real answers
Having satisfied their wealthy donors with this massive tax cut bill, Republicans are attempting to shift the blame for and to paint a rosy picture of the rural hospital crisis they created. For example, Dr. Oz blamed it on big cities and undocumented residents.
Speaking to reporters in February, Vice President JD Vance responded to a question about the rural hospital crisis by saying, “Unfortunately, this, like so much of what’s going on in the country right now, is a problem we inherited from the previous administration.”
Dr. Oz even seems to think it’s cool that there are not enough physicians to serve rural communities. At a White House roundtable discussion about health care in rural America with Trump, RFK Jr., and other healthcare advisers, he said it’s “pretty cool” that they’re having to use robots to perform ultrasounds on pregnant people because of the shortage of OB/GYNs there:
“Alabama has no OBGYNs in many of their counties, so they’re doing something pretty cool. They’re actually having robots do ultrasounds on these pregnant moms so we can actually get those images back to the big center so we know if this child has a problem and we know if that mother is at risk. We have one of the highest maternal mortality rates in the world in the country with the best medicine in the world…”
Oz and RFK Jr. both tout artificial intelligence as the solution for dying hospitals:
Health Secretary Robert F. Kennedy Jr. and his team want to Make Rural America Healthy again.
He has suggested that AI nurses could save dying rural hospitals. Centers for Medicare and Medicaid Services Administrator Mehmet Oz said robots could give ultrasounds to women and touted how AI avatars could help. [...]
Their ultimate “solution” to the crisis is invariably the RHTF. Not only does it not even half fill the $137 billion hole in rural health care funding they created with the OBBBA, it’s being used as both a cudgel and a political weapon. For example, the federal government can claw back RHTF funds or reduce future funding to force states to do things the way the Trump administration wants them done. Via KFF Health News:
During the past six months, as states raced to meet the program’s looming federal deadlines, CMS staffers worked with state health departments to make a flurry of changes, including scrapping some initiatives. The federal agency has the power to rescind existing funding — or reduce future awards — if states don’t follow rules or meet their goals. “We will take the money back” if states “don’t abide by what they wrote, if they don’t do a good job,” Oz said at an event this month in Washington, D.C. [...]
Talking Points Memo highlighted how the requirements for receiving funds from the RHTF are politically charged:
Before the program was rolled out, healthcare stakeholders told TPM that its parameters could disadvantage certain states and benefit others. The CMS scoring system distributed the funds based on a complex weighted formula which included a range of partisan policy-based factors, including whether states restrict SNAP users from buying “non-nutritious foods” and whether states plan to require Trump’s “Presidential Fitness Test” in schools. State scores could also be impacted if the state restricts certain health insurance plans, sometimes called junk plans, which don’t comply with Affordable Care Act coverage standards.
“We have an administration which just says right out, ‘We’re gonna cut money to blue states and blue communities,’ and it is doing it,” Adam Searing, an attorney and research professor at the Georgetown University McCourt School of Public Policy, told TPM in November. “If you happen to live in a community that we disagree with politically, too bad.”
Crisis not averted
Dr. Oz was right about one thing, rural hospitals have been in big trouble for some time. However, taking $137 billion from them and replacing it with less than half that amount of a “hunger games” style program that is used to force states to comply with the Trump administration’s goals is rapidly making matters worse. The problems confronting rural communities will not be addressed solely through the use of robots and artificial intelligence. They need a comprehensive plan of investment into health care that can strengthen these important components of rural communities.
Thank you for your Paging America Substack Dr.
For 45 years we have tracked the demise of public health infrastructure in the United States. Now, at the end of late-stage capitalism, the volcanic support for ending the preventable harm and death is at historic levels.
The solution?
House Resolution 3069, the National Improved Medicare for All bill will fundamentally restructure hospital financing to guarantee financial stability and sustainability not only in rural areas but across the United States.
It shifts the financial paradigm away from competitive market-based revenue toward guaranteed federal operating budgets.
Our Single Payer Universal Healthcare bill uses specific financial mechanisms to stabilize the destabilized model and it prevents hospitals from suffering through healthcare policy whiplash every 2, 4, 6, 8 years when ideologues, religious zealots or incompetent elected officials with no public health knowledge are holding office.
The National Improved Medicare for All bill will also reduce harm from M&A vultures, put restrictions on private equity and prevent staff cuts that cause dangerous staff-to-patient ratios.
The bill also has guardrails for preventing unchecked greed by senior management.
And much, much more.
1) Shift to Guaranteed Global Budgets
Hospitals will no longer bill insurance companies per individual patient encounter, procedure, or bed-day. Instead, they will receive a fixed, predetermined annual operational budget ("global budget") negotiated directly with the Department of Health and Human Services (HHS). This provides predictable, guaranteed cash flow that covers all necessary annual operating costs regardless of short-term patient volume shifts.
2. Elimination of Uncompensated Care
Because the bill mandates automatic universal enrollment for all U.S. residents, hospitals will completely eliminate bad debt from uninsured patients. Every single patient walking through the doors is fully covered. This eliminates the millions of dollars in financial losses hospitals currently absorb annually from charity or uncompensated emergency room care.
3. Complete Removal of Administrative Waste
The Single Payer Universal Healthcare bill eliminates the complex administrative web required to track different private insurance plans, bill individual patients, and appeal denied claims. Under H.R. 3069, prior authorizations and insurance networks are banned. Hospitals can drastically reduce their billing, coding, and administrative departments, redirecting those funds back into direct clinical operations.
4. Separation of Operational and Capital Funding
To stop hospitals from accumulating risky, high-interest debt for expansions, major structural investments are separated entirely from everyday patient care budgets. Funding for major capital projects—like building new wings or purchasing expensive medical machinery—is distributed via a separate, planned federal allocation. This prevents regional hospitals from over-leveraging themselves or going bankrupt over real estate and asset investments.
5. Elimination of Out-of-Pocket Collection Costs
The Single Payer Universal Healthcare bill prohibits all patient cost-sharing, including deductibles, copayments, and coinsurance. Hospitals will no longer need to spend time or money collections-testing patients for unpaid deductibles, ensuring that 100% of their operational funding is delivered seamlessly through the National Improved Medicare for All Trust Fund.
Learn more in THE FINE PRINT Magazine and at "SOME PEOPLE."