Hospital closures rise in 2025 amid ongoing financial pressures

Editor's Note

Ten hospitals have reportedly closed 3 months into the year, with five shuttering in February alone—a stark escalation compared to the 25 closures reported in 2024 and 14 in 2023, Becker’s Hospital Review March 21 reports. This troubling trend raises questions about the mounting difficulties hospitals face, from financial burdens to operational challenges.

Hospitals continue to grapple with numerous issues, which are further compounded by payment pressures. “America’s hospitals and health systems are grappling with significant challenges, including broken supply chains, workforce shortages, cyber threats, and behavioral health issues,” said Alicia Mitchell, senior vice president of communications for the American Hospital Association (AHA), according to the article. She added that underpayments by government programs and restrictive commercial insurer policies exacerbate hospitals’ struggles to maintain care standards.

Beth Feldpush, DrPH, senior vice president of policy and advocacy for America’s Essential Hospitals, echoed similar concerns. She also noted how potential Medicaid funding cuts can further endanger these facilities’ bottom line. “[T]here is no way that the healthcare system could absorb those cuts without facing the closure of many more hospitals,” she cautioned, per the article.

With around 37% of hospitals still operating at a loss, many have resorted to cost-saving measures such as layoffs, outsourcing, and reducing specific service lines. However, closures remain a grim yet increasingly common solution for facilities under intense financial strain.

Hospital advocacy groups stress that safeguarding essential coverage programs is one of the most critical strategies for preventing further closures. As closures rise year by year, industry leaders say legislative support and sustainable reimbursement models will be pivotal in reversing this alarming trend—and keeping essential healthcare services accessible to patients nationwide.