Improved Medicare for All Will Save Our Rural Hospitals

After a century of providing healthcare to this rural, southeast Michigan community, Sturgis Hospital closed in June with only 70 hours warning.

The hospital was not on the at-risk-of-closing list that had been published by Sen. Ed Markey (D-Mass.) a year earlier.

Over 300 Sturgis Hospital employees are scrambling to find work. Registered nurse Beth Kelley, who had worked at Sturgis for 32 years, described the meeting room as filled with “shock” and “devastation” when management announced that the hospital was closing.

Nationwide more than 700 rural hospitals are at risk of closing, over half at immediate risk within the next two to three years. The 700 hospitals represent about one-third of all rural hospitals.

The termination of care at Sturgis Hospital overloads the city’s emergency medical services. Director of public safety Ryan Banaszak said, “What was once approximately a 2-mile transport for patients has now become closer to 25 miles, which takes ambulance personnel and equipment out of service for a much longer period of time.”

The impact is great on Michigan Medicaid patients, who cannot use the closest hospital because it is across the state line in Indiana.

“Rural hospital closures lead to significant increases in mortality, and birthing outcomes and obstetric care suffer following closures,” said Michael Shepherd, University of Michigan health policy researcher. The risk increases with every additional mile for emergencies like strokes and heart attacks.

A few weeks later the rural River District Hospital in St. Clair County northeast of Detroit announced the closing of its inpatient and emergency services. Four more rural Michigan hospitals—in Mt. Pleasant, Carson City, Ontonagon, and Dowagiac—are in danger of closing with the upcoming Medicaid cuts.

Rural Americans live sicker and die younger than those in urban areas. Life expectancy is about three years shorter in rural communities. When a rural hospital closes, the mortality rate rises by 5.9%. Rural hospital closures increase mortality for emergencies such as heart attacks and strokes by about 10%.

“There are two kinds of Americans: those who live 12 minutes from an emergency department and those who live 72,” writes Ayla Ellison who grew up in Carmi in southern Illinois. “Whether you survive a heart attack, deliver a healthy baby, or die from something entirely treatable increasingly depends not on the severity of your illness, but on the distance to the nearest hospital,” she continues. She explores the consequences of rural hospitals folding in a country where no one is responsible for assuring help is close enough for a chance at life. The hospital in Carmi closed 20 years ago. Nine more Illinois hospitals are at risk of closure, most of them in southern Illinois.

Other states are worse off. In Mississippi, 51% of the rural hospitals are at risk of closing; in Alabama, 52%; in Arkansas, 68%.

Dr. Kenneth Williams battled for decades to sustain the hospital (Alliance Healthcare System) in Holly Springs, Mississippi. Rapid expansion of Medicare Advantage plans reduced reimbursement and increased denials of payment to the hospital. In 2023, facing financial desperation, the hospital converted to Rural Emergency Hospital status, a federal program designed to stabilize struggling rural hospitals. The Center for Medicare and Medicaid Services (CMS) later removed that designation, leaving the hospital again fighting to stay open.

Nationwide more than 700 rural hospitals are at risk of closing, over half at immediate risk within the next two to three years. The 700 hospitals represent about one-third of all rural hospitals. That report was prior to the passage of HR 1, the “One Big Beautiful Bill” that slashes $1 trillion from Medicaid. The crisis escalates from grim to disastrous with the looming Medicaid cuts.

Federal efforts to save our rural hospitals have been pitifully inadequate in the face of the towering problem.

Critical Access Hospitals, created by Congress in 1997, allow small rural hospitals to receive cost-based Medicare reimbursement. The plan was designed to stem the tide of closures.

Between 2010 and 2025, 152 rural hospitals closed. Of these, 52 were Critical Access Hospitals.

In 2021 Congress created Rural Emergency Hospitals. This designation provides for enhanced Medicare payments allowing rural hospitals to continue with outpatient and emergency services only, instead of closing.

In 2023, Sturgis hospital was “saved” by conversion to a Rural Emergency Hospital, delaying its shutdown by three years.

Neither these nor any other federal plans are big enough or thorough enough to work.

CMS Director Mehmet Oz recently visited Kentucky, home of 35 rural at-risk hospitals. He touted the $50 billion in Rural Health Transformation Funds as the solution. The assertion is absurd.

At best, Kentucky will get $1 billion from the rural transformation funds as it loses $21 billion in Medicaid funds. Not even a wizard can turn that into a winner.

As Boston University professor Alan Sager notes, no US entity is responsible for sustaining or building or financing hospitals based on community need.

“The whole Appalachian area has been abandoned, but its hospitals should be funded and improved, as a necessity of life—like the post office,” says Dare Cima, who is from southeastern Kentucky.

With passage of H R 3069, Improved Medicare for All, finally, the nation will take responsibility for assuring that rural areas have adequate facilities. Hospitals will be paid quarterly, in advance, with a global budget that provides operating expenses.

The allocation to hospitals ensures proper staffing with safe nurse-to-patient ratios and optimal staffing for physicians and other healthcare workers. Physician salaries can be included in the global budget. Adjustments to the operating budget will be made “to decrease healthcare disparities in rural or medically underserved areas.”

Special projects funds will be used to end discrimination based on race or other underserved categories including geography. Funds will be allocated for construction of new facilities where needed. At long last, the nation’s healthcare plan will guarantee that not only is everyone covered for care, free at the point of service, but that there is a place within reasonable distance to find that care.

The late Dr. Ewell Scott, Medical Staff president of St. Clair Regional Medical Center in Morehead in the mountains of eastern Kentucky, predicted that if current policy continued, it was just a matter of time until all of Kentucky’s hospitals east of I-75 would be closed.

Sadly, that prediction is breathtakingly close as 16 of east Kentucky’s hospitals in the 5th Congressional District, including Dr. Scott’s beloved St. Clair hospital, are on the list of those endangered with closing by the passage of HR 1.

But Dr. Scott was fighting for a different future. He persuaded the City of Morehead to pass a resolution supporting Improved Medicare for All, a national single-payer plan that would cover us all and fund the hospitals.

Dr. Scott urged all who would listen to tell their congresspersons: “We know the solution. You’ve got to have the guts to stand up and do it.”