Not even three months into 2025, Becker’s has already reported on 10 hospital closures, with five of them occurring in late February alone.
In 2024, Becker’s reported on 25 hospital closures, up significantly from just 14 in 2023. The question remains — Why are we seeing hospital closures ramp up year after year?
“America’s hospitals and health systems are grappling with significant challenges, including broken supply chains, workforce shortages, cyber threats and behavioral health issues,” Alicia Mitchell, senior vice president of communications for the American Hospital Association, said in a statement shared with Becker’s. “At the same time, chronic government underpayments and restrictive commercial insurer prior authorization policies further strain hospitals, as they strive to provide patient care.”
Beth Feldpush, DrPH, senior vice president of policy and advocacy for the American’s Essential Hospitals, also told Becker’s that challenges such as high labor costs, supply chain disruptors and rising cyber-security threats are pressure points for already struggling hospitals.
As hospital financial struggles persist, around 37% of facilities are still operating at a loss, leading to difficult decisions like layoffs, service line cuts, outsourcing and an increasing number of hospital closures in 2025.
Dr. Feldpush also pointed to ongoing concerns over potential Medicaid funding cuts, which could have significant impacts on hospital revenue, specifically those in rural or underserved areas.
“[T]here is no way that the healthcare system could absorb those cuts without facing the closure of many more hospitals,” Dr. Feldpush said.
Charlene MacDonald, executive vice president of public affairs for the Federation of American Hospitals, told Becker’s one of the ways to prevent future hospital closures is to ensure protection of Medicaid and Medicare.
“Improving coverage, and fixing historic underfunding by government programs will be key to safeguarding patients’ 24/7 care in communities across the country,” Ms. MacDonald said.
Ms. Mitchell also pleaded with policymakers to provide support to help strengthen American hospitals.
“Hospitals are the backbone of community health, playing an indispensable role in ensuring the wellbeing of our communities,” she said. “The AHA urges Congress and the [Trump] administration to reject cuts to patient care, ensuring hospitals can continue their vital work.”