Hospitals

Why US Hospitals Are Going Bankrupt

Emergency sign above a hospital entrance
Ben Hasty/MediaNews Group/Reading Eagle via Getty Images

Hospitals across the United States are facing financial ruin.

As coronavirus spreads across rural America, many struggling hospitals are seeing a massive loss of revenue after they were forced to cancel profitable elective procedures.

At the same time, many of those same facilities are in urgent need of pricey ventilators to keep their Covid-19 patients alive. 

"A lot of hospitals are holding off on ordering ventilators because of the financial implications of this. And again, I think this is an issue with smaller hospitals," said Dr. Chethan Sathya, a physician at New York-based Northwell Health. "This could bankrupt many of those smaller hospitals."

Before the pandemic, about half of rural hospitals operated in the red. 

They tend to have lower patient volume than their big city counterparts and treat people who are generally older and sicker and rely heavily on Medicaid and Medicare.   

Hospitals in states that didn’t expand Medicaid under the Affordable Care Act area also in a weaker financial position, according to studies.

Texas is one of several states that refused to expand Medicaid under the Affordable Care Act, forgoing an estimated $100 billion of federal funding in the 10 years to 2029. The state has already seen 15 hospitals close since 2010.

COVID-19 has only added to those problems.

As the outbreak spreads, rural hospitals are forced to furlough workers like nurses and support staff at a time when health-care professionals are needed the most. 

The question is, will rural hospitals go bankrupt buying ventilators?

Watch this video to find out more about how rural hospitals are struggling to survive.

This story first appeared on CNBC.com. More from CNBC:

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