Report: Rural Virginia hospitals at risk of closure

A new state report found that 13 of Virginia's 36 rural hospitals are at risk of closing, including the New River Valley's Carilion Giles Community Hospital and LewisGale Hospital Pulaski.

A combination of low market share, limited negotiating power with health insurers, low Medicare and Medicaid reimbursement rates, inflation, high fixed costs and anticipated cuts from President Donald Trump's "One Big Beautiful Bill Act" could force more than a third of Virginia's rural hospitals to close, according to a report released earlier this month by the Virginia General Assembly's Joint Commission on Health Care.

Hospital leaders and Republican lawmakers pushed back on the report's findings, arguing they do not fully capture the financial condition of some facilities.

Those closures would send a damaging shock wave through rural Virginia. Reduced access would force residents to travel farther for care, skip treatment and lose access to emergency and inpatient services, leading to higher morbidity and mortality rates among adults, infants and mothers in rural communities.

The closures would represent the next step in a nationwide trend. Since 2005, 139 rural hospitals across the United States have reduced services, cutting overnight inpatient care and instead focusing on emergency and outpatient treatment, which is less expensive and more financially predictable.

Among the hospitals highlighted in the report, Carilion Giles Community Hospital was identified as facing an "immediate risk" of closure, while LewisGale Hospital Pulaski was among the facilities categorized more broadly as being "at risk."

The current state of rural health care in Virginia already leaves residents at a disadvantage. Rural Virginians experience avoidable hospitalizations at four times the rate of their urban counterparts, according to the Virginia Department of Health.

Can closures be prevented?

Earlier this month, two Democratic members of the Joint Commission, Sen. Barbara Favola of Arlington and Del. Rodney Willett of Henrico County, met via Zoom with activists, reporters and rural Virginians to discuss the report.

"We all see a lot of reports in these positions that we hold, and this is one of the most disturbing ones I've ever read," said Willett, who also chairs the House Health and Human Services Committee. "This is absolutely a crisis that we're facing."

Virginia lawmakers do not yet have a policy plan to address possible closures. At the beginning of the month, members of the commission directed staff to continue studying the issue, assess the effects of the One Big Beautiful Bill Act, formally known as H.R. 1, and develop recommendations.

What is clear, the lawmakers said, is that Virginia will not be able to fill the gap from the federal funding lost under Trump's keystone legislation.

"We will not be able to make up the difference," said Favola, the commission's chair.

The legislation is expected to cut more than $2 billion from Virginia hospitals, while between 100,000 and 300,000 Virginians are projected to lose Medicaid coverage. It also imposes Medicaid work requirements and limits provider taxes, which states have used to collect money from profitable hospitals and redistribute it to struggling facilities.

Taken together, the provisions "tie the hands" of the state government in responding to hospital closures, Willett said.

The lawmakers pointed to several measures that could help. The Rural Health Transformation Initiative, a federal grant program, has provided Virginia with $189.5 million to support rural hospitals, which Favola said could help keep facilities open. Willett also emphasized the importance of investing in community health centers, which provide a safety net for uninsured and underinsured residents.

The two Democratic legislators said meaningful change will require congressional Republicans to support restoring health care funding.

"There need to be changes in the federal policy," Favola said. "H.R. 1 would be devastating if it's to stay in place."

Willett echoed her concerns, calling the actions of the Republican-controlled Congress "unconscionable."

Republicans, hospitals push back on report

Six of the 13 hospitals identified as being at risk are in Virginia's 9th Congressional District, represented by Rep. Morgan Griffith, R-Salem. Six others are spread across districts represented by Republican Reps. Rob Wittman, Ben Cline, John McGuire and Jen Kiggans. One is in the district represented by Democratic Rep. Jennifer McClellan.

All of Virginia's Republican members of Congress voted for H.R. 1.

In an email on June 9, Griffith said he is "in close contact" with the rural hospitals in his district.

"It does little good for current and prospective medical professionals in our region when incomplete reports stoke fear, uncertainty and anxiety in our communities," he wrote.

In a statement, LewisGale Hospital Pulaski said the report "appears to rely" on publicly available financial data and that, because the hospital is part of the broader LewisGale network, the analysis "may not fully reflect our hospital's position."

Carilion Clinic Executive Vice President and Chief Financial Officer Don Halliwill said in a statement: "We're closely monitoring H.R. 1, and it is premature to speculate on its potential implementation impacts."

Both health systems emphasized that they are not closing hospitals.

Sen. David Suetterlein, a Roanoke County Republican who sits on the joint commission, said that although the report "understandably" created anxiety, "reassuringly, the facilities highlighted in the report are well positioned as partners of larger health systems," and the parent systems have committed to care in rural Virginia.

"One thing that was not covered in the report, that's a source of optimism, is that there's two more hospitals in rural southwest Virginia than there were two years ago," he added.

The most recent new hospital in Southwest Virginia came in January in Patrick County when The Stuart Community Hospital reopened after nearly a decade since its closure.

"Whenever any individual hospital seeks to reduce service, that's always a concern, but the report focused only on the concerns without highlighting any of the new positives," Suetterlein said.

Ethan Hunt (540) 381-1678 [email protected]