Why ‘Still Open’ Is the Wrong Way to Measure the Hospital Crisis

One of the most standard ways to measure the country’s hospital crisis is to count closures, but a healthcare finance specialist argues that this figure alone does not capture the full picture.

“If you just look at the metric of hospitals closing, you will miss the big picture,” said Duane Fitch, partner and leader of the national healthcare management division at Plante Moran.

Despite dozens of hospitals closing last year, an even greater number have been compelled to eliminate essential services — such as emergency care, labor and delivery, psychiatric units, and surgical departments, Fitch noted.

Such gradual reductions are typical; hospitals rarely shut entirely in a single day. Instead, they methodically assess budget constraints and phase out services that are no longer financially viable. Consequently, a hospital may remain open while no longer offering comprehensive care.

Hospitals most at risk of this gradual erosion include critical‑access facilities in rural regions and safety‑net hospitals serving low‑income urban populations, according to Fitch.

Their financial situation is precarious, as the majority of their patients are covered by Medicare, Medicaid, or are uninsured, resulting in low reimbursement rates.

Recruiting physicians and nurses to work in these settings often necessitates offering salaries that exceed those of comparable hospitals, Fitch added.

“This creates a dynamic where provider costs are substantially higher while reimbursement rates are substantially lower,” he explained.

This financial gap places nearly all subsidized services at risk of elimination. Obstetrics is typically the first to be cut — a hospital may reduce its NICU capacity, then trim labor and delivery services before discontinuing obstetric care entirely. Surgical, oncology, dialysis, inpatient rehabilitation, and psychiatric services often follow.

These reductions are intended to stabilize hospital finances, yet they generally provide only a brief reprieve; they tend to postpone rather than avert the inevitable.

The cumulative effect is a steady decline in access to care for the communities that need it most, he added.

The trend Fitch described raises an uncomfortable question: if a hospital continually cuts the services that originally made it essential to its community, can it truly still be considered a hospital?

“These hospitals can become unrecognizable compared to what they once were — a trend that is increasingly common,” Fitch declared.

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