Latest / Becker’s Healthcare Podcast / Hospital Closures, Consolidation and the Financial Pressures Shaping Healthcare with Alan Condon

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Hospital Closures, Consolidation and the Financial Pressures Shaping Healthcare with Alan Condon · Becker’s Healthcare Podcast

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  - There's a small circle of people who truly
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  - understand what it takes to lead a health
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  - system right now. The decisions are enormous.
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  - The variables are constantly shifting, and the stakes
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  - of getting a call wrong don't stay contained.
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  - That's not a complaint. It's a structural reality.
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  - And it's why the most effective c suite
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  - leaders are deliberate about where they go to
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  - pressure test their thinking.
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  - Becker's fourteenth annual CEO and CFO roundtable
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  - brings together more than 1,500
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  - executive level attendees
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  - and nearly 400 speakers for four days built
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  - around growth, financial sustainability,
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  - workforce strategy, and the leadership questions that don't
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  - have easy answers.
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  - Join us November second through the fifth in
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  - Chicago.
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  - For the agenda and event details,
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  - visit becker'shospitalreview.com
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  - and click on the events tab in the
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  - upper right.
• 0:50
  - Hello, and welcome to the Becker's Healthcare podcast.
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  - My name is Chanel Banger. And today, I
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  - have the pleasure of speaking with regular guest,
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  - Alan Compton, editor in chief at Beggars Healthcare,
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  - who joins us to share insights into health
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  - care trends he's keeping an eye on. Alan,
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  - thank you so much for joining me today.
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  - Why don't you take it away and tell
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  - us about some of the things that you're
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  - seeing out there?
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  - Yes. Absolutely. Thanks so much, Janelle. It was
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  - a pleasure.
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  - So I think going on at any given
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  - time, in health care finances, you know,
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  - I think
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  - what's been interesting about 2026
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  - so far is we haven't had much hospital
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  - closures.
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  - Not that anybody looks forward to hospital closure,
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  - but just given the financial challenges that we've
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  - seen really ramping up this year in light
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  - of, many, many financial challenges now and also
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  - coming down the pipeline as it relates to
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  - Medicaid funding and whatnot.
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  - We saw about 24, 25 hospital closures in
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  - 2024,
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  - about 25 hospital closures in 2025.
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  - This year, we've only seen four hospital closures,
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  - and the latest, unfortunately, of which
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  - just came last Friday in Michigan. So just
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  - to kinda give a a readers a quick
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  - update and breakdown of what happened there,
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  - Sturgis Hospital in Michigan,
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  - just on Friday, shut down operations completely
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  - after years of financial challenges and really unsuccessful
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  - efforts to secure
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  - a long term path forward.
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  - The hospital has cited years of these ongoing
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  - financial challenges from declining reimbursement rates,
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  - rising operating costs, and and decreases in patient
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  - utilization
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  - as really the key key reasons
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  - for the closure.
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  - This hospital wasn't something that's been independent hospital,
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  - of course, but it was opened in 1925.
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  - It's been
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  - operating for a hundred or one years. A
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  - real core core critical service provided to this
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  - rural community.
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  - I think what's interesting about this hospital as
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  - well is Sturgis Hospital became one of the
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  - first hospitals in the country,
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  - and the first in Michigan
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  - to officially convert to a rural emergency hospital.
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  - That was in 2023.
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  - So that designation will was,
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  - rated by CMS to
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  - strengthen emergency services and increase federal funding for
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  - these high type of hospitals. So preventing some
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  - of these rural community critical access hospitals from
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  - closing completely,
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  - Rather, they would sacrifice some of their inpatient
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  - services and focus focus exclusively
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  - on outpatient care and emergency care. So still
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  - being able to buy provide those critical services
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  - for some of those, rural communities.
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  - So, unfortunately, that was the fourth fourth hospital
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  - closure we reported on this year. And, just
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  - given the financial challenge that we're seeing coming
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  - down the pipeline, many, many hospitals in the
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  - same boat as Sturgis Hospital in terms of
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  - same same challenges that it cited, really declining
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  - reimbursement rates, rising operating costs, inflation still, so
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  - such a key problem as well, and labor
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  - costs from these communities
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  - and decreases in patient utilization.
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  - So, unfortunately, we had to report on that
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  - on that closure last week. Just a quick
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  - update there of what we're seeing and what
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  - we might potentially see
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  - coming down the pipeline.
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  - Jumping over to the East Coast and on
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  - the other side of the spectrum,
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  - we're seeing
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  - no doubt we're seeing a lot of closures,
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  - service cuts, scale backs across the board as
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  - hospitals, health systems really shore up their finances.
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  - One way that many hospitals are doing that
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  - and also remaining open to remaining financially sustainable
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  - is partnering,
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  - with larger health systems being acquired, merging with
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  - larger health systems for a larger financial backer.
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  - So one interesting merger that we're following last
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  - week is,
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  - Hackensack
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  - Meridian Health in New Jersey. Just signed a
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  - letter of intent to explore a proposed merger
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  - with Funderd and Health is also new in
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  - New Jersey, a smaller,
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  - one hospital health system there. So
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  - under that proposed partnerships, those two systems will
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  - combine their resources, technology,
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  - expertise, really expand and support health care, focus
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  - on outcomes,
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  - clinical research and benefits,
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  - and academic and community
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  - benefit programs. So one of the
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  - many recent mergers, acquisitions that we're seeing being
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  - explored by these larger academic systems specifically,
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  - and some of these smaller,
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  - hospitals and hospital systems
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  - across the board. So that, again, is a
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  - letter of intent, not not in any way,
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  - shape, or form a final agreement, but,
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  - something that no doubt Hackensack Meridian Health is
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  - exploring as it continues to grow.
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  - Hunter and Health comprises
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  - its flagship hospital and they've got a growing
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  - network of about 30 or so medical practices
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  - across Central New Jersey.
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  - So that would it should that acquisition go
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  - through, Hackensack Meridian would then grow to a
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  - 19 hospital system, has about 500 care sites,
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  - more than 40,000 employees, huge, huge academic system
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  - with a great prominent reputation in the New
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  - Jersey community there. So
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  - one hospital closure, unfortunately, and then one big,
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  - potential academic system acquiring
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  - another hospital and growing bigger on the East
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  - Coast Chanel. So those are two quick stories
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  - I wanted to highlight today.
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  - Amazing. Well, Alan, I wanna thank you as
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  - always for keeping us updated on all of
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  - these important trends and for joining me today
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  - on the Becker Self Care Podcast. Thank you
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  - so much. Always a pleasure. Thank you.