Rural Hospitals Face Mounting Pressures, Closures

As rural hospitals face an accelerating crisis, pharmacists have a unique opportunity to expand their practices and services and protect the health of rural populations, asserted Brock Slabach, MPH, FACHE, Chief Operating Officer of the National Rural Health Association (NRHA) during the Small and Rural Keynote at the American Society of Health-System Pharmacists (ASHP) Midyear Clinical Meeting & Exposition in Las Vegas, Nevada.

Increased Health Care Challenges for Rural Hospitals, Residents

"Approximately 20% of the US population [lives] in a rural community," ASHP President Melanie Dodd, PharmD, PhC, BCPS, FASHP, said in her introduction to the session. "We rely on our small and rural hospitals to provide quality health care."

Since 2010, Slabach said, 153 rural hospitals have closed, according to information from the Sheps Center for Health Services Research. Far more worrisome, Slabach shared December 2024 data from the Chartis Center for Rural Health showing 432 hospitals were vulnerable to closure in 2025 alone, a frightening number in the context of HR 1, the One Big Beautiful Bill Act, that passed in July 2025 and whose effects will likely not be seen until 2027. Both data sets showed that affected hospitals were primarily concentrated in the midwestern and southeastern United States, which are already burdened with high levels of poverty (as measured by reliance on public benefits) and chronic disease.

Slabach also said 42 rural hospitals, mainly in southeastern states, had converted to the Rural Emergency Hospitals program (REH) under the 2023 program. While these hospitals provide acute care, Slabach said, they are "[required] to cease inpatient activity, so no longer can patients be admitted except for a brief observation stay." Beyond this, patients must be transferred to another hospital for inpatient care. "One of the real limitations of the REH is that while it's okay to have an emergency department that's taking care of a patient in an acute phase of their illness, often the emergency medical systems are taxed to be able to get patients from that REH to a transferring hospital."

In terms of affordability, about 60% of the hospitals that have either closed or converted to REH facilities were Prospective Payment System (PPS) hospitals under Medicare before their closure or conversion. By removing these PPS facilities from the rural health landscape, affordable care options for residents have become limited or even eliminated.

Federal Funding and Regulations: The Good, the Bad, and the Very Bad

Under HR 1 (OB3, as Slabach called it during his presentation), federal funding for rural health care was cut by about $137 billion. The bill included a new program, the Rural Health Transformation Program (RHTP), which provides $50 billion to stabilize and modernize rural health systems, but this still leaves a massive shortfall. "In your hospitals, when you see ... your administrative and C-suite offices worried about budgets for the next ... 5 to 10 years, this is one of the driving factors that's behind that," Slabach said.

"Unfortunately, over half of the spending reductions in rural areas are among 12 states that (1) have large rural populations, and (2) have expanded Medicaid. So if you are in both of those categories, you are going to [have] higher concentrations of reductions in spending estimates for next year," Slabach said. Those states include Alaska, Kentucky, New Mexico, West Virginia, Louisiana, Montana, Maine, New Hampshire, and Arkansas.

Medicaid cuts under OB3 will also cause rural hospitals to lose about 21% of their funding overall, which will impact the nearly 20% of rural adults and 40% of rural children who rely on either Medicaid or the Children's Health Insurance Program for their health care. On top of those cuts, eligibility and enrollment work and determination requirements under Medicaid will impose a substantially greater burden on both states and enrollees.

"Estimates from the Kaiser Family Foundation [are] that there will be an increased number of uninsured [people] by 5.3 million by 2034," Slabach said. It's also likely to increase churn, which Slabach defined as the number of people going on and off Medicaid in quick succession.

"These requirement impositions don't begin until 2027 essentially, so they actually delayed the impact of some of the reductions in spending until after the November 2026 elections, so the impact won't be felt by those who might be going to vote."

Premiums on the health care marketplace exchange have also increased by about 107% for 2026, Slabach said, and he's already seen people question their ability to pay them. "[Individuals are] starting to look at these increased premiums and ... starting to make decisions based on, 'Do I pay the additional $1000 a month, or do I buy food?' I mean, this is the kind of dynamic [within] which a lot of patients are having to make choices."

A significant portion of Slabach’s keynote focused on the RHTP, the initiative under OB3 that proposes $50 billion to support rural health systems. The program allocates $10 billion per year for 5 years to states willing to redesign care delivery, strengthen hospital infrastructure, experiment with new payment models, and support clinical workforce expansion in rural settings.

Slabach outlined the application process that states must use to get funding under RHTP. The proposals can be highly tailored so each state can design solutions to their own care-delivery gaps for rural residents. Critically for the ASHP audience, pharmacy services are eligible for funding under RHTP, and pharmacist-led initiatives such as medication management, chronic disease management, and access to preventive care can and should, Slabach said, be included in any funding proposal.

Other legislation and lobbying efforts have both improved and worsened the outlook for rural health, and Slabach encouraged his audience to lobby their representatives to support bills that have increased rural hospital support and repeal other aspects of OB3 that will have negative downstream effects, especially for pharmacists. One example of this is the elimination of Grad PLUS Programs for new borrowers beginning July 1, 2026, and the capping of unsubsidized graduate school loans at $50,000 per year for professional students with a lifetime cap of $200,000, which Slabach said will not cover the cost of an MD or PharmD degree.

Pharmacists' Role in Rural Care

Throughout the keynote, Slabach emphasized the role pharmacists play as one of the most stable groups of clinicians in rural communities. "If you lived or worked in a rural area as part of your training, you're more likely to go back to a rural area and be able to practice or do your work in that community," Slabach said. He pointed to several areas where pharmacists can play a larger role, including transitions of care, chronic-disease optimization, medication safety, and antimicrobial stewardship.

As federal and state policymakers consider rural redesign models, Slabach stressed that pharmacy services must be treated as core infrastructure rather than supplementary functions. He also stressed the power pharmacists have to impact legislation and fight for rural health.

"You all are such a well-respected and such a highly esteemed occupation that your senators and congressmen absolutely pay attention to," Slabach said. "It's important to use that advocacy on behalf of the patients and populations that you serve, because you are in a place where you make a big difference for the lives of people in your rural communities every day."

REFERENCES

Slabach, B. Small and Rural Keynote 2025: The Evolving Landscape of Rural Health. American Society of Health-systems Pharmacists Midyear 2025 Clinical Meeting and Exposition. December 7-10, 2025. Las Vegas, Nevada.