More than a quarter of Pennsylvania’s rural hospitals ended the past fiscal year in the red as they reckoned with an aging patient population, rising costs and dwindling payments from government programs.
Rural hospitals in Pennsylvania and around the nation have been dropping specialties and closing their doors in recent years as they’ve struggled with financial headwinds. These disappearing services can leave communities vulnerable, requiring some residents to travel long distances to access care.
An Aug. 13 report issued by an independent state agency explores the financial well-being of hospitals in the commonwealth, tracking their income and the growing amount of unpaid care they’ve been providing.
The picture wasn’t all bleak, according to the report, which noted that patient revenues jumped by 8% year over year and operating margins for rural hospitals also ticked up.
Still, the Pennsylvania Health Care Cost Containment Council’s report pointed to several specific challenges for these rural health systems:
- The amount of uncompensated care they’re providing is going up. Rural hospitals in fiscal 2025 provided $192 million in unpaid care, an increase of more than 9% compared to the previous year. Even insured patients are increasingly “unable to meet cost-sharing obligations,” the report’s authors noted.
- It can be more expensive for rural hospitals to provide care. Longer travel distances and staffing shortages that are particularly acute in these communities contribute to higher costs.
- Government programs, like Medicare and Medicaid, are lagging as a source of revenue for hospitals. That’s a big problem, since these programs together accounted for more than 54% of patient revenues at rural hospitals last year.
- Rural populations are aging. By 2030, a third of the commonwealth’s population will be 60 and older, and the PHC4 report notes that older people often need more complex and expensive care.
- Rural hospitals serve a smaller pool of patients. That can present a challenge because, in many cases, hospitals incur fixed costs for offering a certain service. For instance, they have to keep a maternity unit staffed around the clock, but when there are no patients the hospital pays for that without any offsetting revenue.
Which rural Pa. hospitals had negative operating margins?
The report noted that in fiscal 2025, 17 of the state’s 63 rural hospitals posted negative operating margins: Penn Highlands Connellsville (Fayette), UPMC Greene (Greene), Uniontown Hospital (Fayette), Bradford Regional Medical Center (McKean), UPMC Cole (Potter), UPMC Jameson (Lawrence), Warren General Hospital (Warren), Conemaugh Meyersdale Medical Center (Somerset), Chan Soon-Shiong Medical Center at Windber (Somerset), Bucktail Medical Center (Clinton), Geisinger Medical Center Muncy (Lycoming), Fulton County Medical Center (Fulton), Penn Highlands Huntingdon (Huntingdon), Barnes-Kasson County Hospital (Susquehanna), Endless Mountains Health Systems (Susquehanna), Wayne Memorial Hospital (Wayne) and Lehigh Valley Hospital-Schuylkill (Schuylkill).
