More than a dozen Pennsylvania hospitals could fail in the next four years unless the state takes action, according to a new report commissioned by the Hospital and Healthsystem Association of Pennsylvania.

The report warns that a Rural Health Transportation Program should offer some help but that the support is far less than the aid hospitals had been getting.

“Hospitals that serve a high proportion of Medicare, Medicaid, and uninsured patients — which includes many rural hospitals — are more exposed to payment shortfalls and coverage losses. The Commonwealth previously supported these hospitals through the Rural Health Model, but that program recently ended,” according to the analysis by the New York-based consulting firm Oliver Wyman. “In most states, estimates indicate that the (Rural Health Transformation Program) will replace less than 25% of Medicaid funds lost due to federal spending reductions; Pennsylvania ranks third lowest in the percentage of lost funds restored.”

More hospitals closed in Pennsylvania in 2025 than any other state and Pennsylvania accounted for almost 1 in 5 of the hospitals that closed in the nation, according to Becker’s Hospital Review.

One of the reasons Pennsylvania has seen more hospital closings is that the state has more hospitals than most other states, including a large number of rural hospitals. Only Texas, California and Florida have more hospitals than Pennsylvania.

But without help, as many as 14 more hospitals could close over the next five years, adding 22 minutes to Pennsylvanians’ average drive to the nearest hospital and costing $900 million in lost wages due to job losses, the report projects. Rural hospitals are especially at risk as they serve a greater share of Medicare, Medicaid and uninsured patients, the health system trade group said in a statement announcing the report.

Fewer than half of the state’s hospitals are operating with sustainable margins and almost 40% are operating at a loss, according to the report.

“This expert analysis underscores the urgent need to safeguard access to the care communities depend on,” Hospital and Healthsystem Association of Pennsylvania President and CEO Nicole Stallings said.

Medicaid reimbursement in Pennsylvania is 11 percentage points lower than the national average.

The state’s Medicaid program — which provides health coverage for nearly 1 in 4 Pennsylvanians — pays hospitals only 71 cents, on average, for each dollar they spend providing care to enrollees.

Possible state actions

The report calls for lawmakers to boost the state’s Medicaid reimbursement rates and for tort reform to rein in medical liability awards.

In 2022, the justices issued a new court rule that liability lawsuits can be filed in any county that a defendant conducts business in, rather than mandating that trials take place in the county where the defendant is based.

Critics have argued that the rule change has allowed lawyers to venue-shop in order to have their trials in areas where juries are more likely to agree to large awards for victims in malpractice cases.

The number of medical malpractice lawsuits filed in Philadelphia doubled after the rule change, according to the Pennsylvania Medical Society.

The report also suggests that the state could use “targeted investments” to help hospitals and health systems cut costs.

“The implications of the scenario modeling are clear: Without a change, Pennsylvania could continue losing two to three hospitals per year or more, hurting local communities and rippling out to surrounding areas,” according to the report. “The alternative is for the state to partner with hospitals through increased reimbursement, regulatory reforms, and targeted investment to preserve reliable, high-quality local care and secure the economic contribution hospitals deliver to communities.”

Recent hospital closings

Saint Catherine Medical Center, Lackawanna County — 2012

Mid-Valley Hospital, Lackawanna County — 2014

Ellwood City Medical Center, Lawrence County — 2019

Sunbury Community Hospital, Northumberland County — 2020

UPMC Lock Haven, Clinton County — 2023

Suburban Community Hospital, Montgomery County — 2025

Crozer-Chester Medical Center, Delaware County — 2025

Taylor Hospital, Delaware County — 2025

Heritage Valley Kennedy Hospital, Allegheny County — 2025