As many as 12 to 14 hospitals in Pennsylvania face closure within the next five years without policy changes to align care costs and payments, according to an analysis from consultant firm Oliver Wyman, commissioned by The Hospital + Healthsystem Association of Pennsylvania.
The analysis revealed that 37% of the state’s hospitals are operating at a loss currently, with less than half maintaining sustainable margins. Over the last decade, 25 hospitals have closed statewide.
Projected hospital closures could add an average of 22 minutes to Pennsylvanians’ drive to the nearest hospital and would eliminate $900 million in wages through job losses.
Pennsylvania’s Medicaid reimbursement rate is 11 percentage points below the national average, with hospitals receiving $0.71 for each dollar spent on care for the program’s enrollees, which is nearly 1 in 4 state residents.
“This expert analysis underscores the urgent need to safeguard access to the care communities depend on,” Nicole Stallings, president and CEO of HAP, said in a Jan. 21 news release. “We cannot have healthy, vibrant and competitive communities in Pennsylvania without strong, financially stable hospitals. HAP stands ready to work with policymakers to ensure hospitals can sustainably serve their communities.”
To this end, the analysis suggests improving Medicaid reimbursement, streamlining administrative requirements and reforming medical liability rules. HAP is also pushing for increased hospital funding in Pennsylvania’s 2026-2027 state budget, the release said.
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