45% of Tennessee hospitals at risk of closure, report says

After 2022 saw 60 percent of Tennessee hospitals operate at a financial loss, a new report commissioned by the Tennessee Hospital Association found that 45 percent of hospitals in the state are now at risk of closure.

In 2019, just 23 percent of Tennessee's hospitals were at risk of closure. Hospital margins in 2022 were down 68 percent from pre-COVID-19 pandemic levels, according to a Feb. 15 press release from Kaufman Hall, the consulting firm commissioned to create the report.

"This new analysis brings the negative financial impact of the pandemic on Tennessee hospitals and health systems into focus and makes clear the urgent need for action," Tennessee Hospital Association President and CEO Wendy Long, MD, said. "Given the unique role hospitals play in the healthcare system — operating 24 hours a day, seven days a week, 365 days a year and treating all comers, regardless of their ability to pay — many traditionally operate on low margins and are vulnerable to shocks in the marketplace. The pandemic exacerbated existing workforce shortages and sent labor costs soaring, while reimbursement from government and commercial payers has not kept up with the increased cost of care."

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