Seven of Virginia's 36 rural hospitals either face an immediate closure risk or are at high risk of experiencing financial distress, according to a presentation given last week to the state's Joint Commission on Health Care.
After hearing this, Del. Rodney Willett (D–Henrico) asked about the rural hospitals that didn't quite make the list.
"About 18 additional hospitals are kind of right there in that next tier of risk," replied Mayesha Alam, a health policy analyst for the commission, "which brings our total to around 25 hospitals across the commonwealth that are facing fairly critical risk."
This means that 19% to 70% of Virginia's rural-area hospitals are under the risk of closing or financial distress.
As VPM News has previously reported, in 2025 Virginia had 28 health care facilities that fit the definition of "rural hospitals." They serve populations that are older, with higher rates of chronic illness and poverty.
Often, they're also the only health care option for people who live near them, forcing patients to travel longer for care if the facility stops providing certain vital services to cut costs — or closes entirely.
This puts a strain on other hospitals that take patients traveling from these rural areas. These facilities also provide jobs for residents, helping to prop up the local and state economies.
Rural hospitals in Virginia and across the US face a precarious financial outlook because of sweeping federal spending cuts included in HR 1, the One Big Beautiful Bill passed last July. Workforce shortages and inflation driving up costs are among other challenges for rural hospitals, Alam said during her June 4 presentation to the commission.
"This is a very sobering report," said state Sen. Barbara Favola (D–Arlington), chair of the health care commission.
Since 2005, 108 rural hospitals in the US have shuttered their doors and 139 have ended inpatient services —including two in Virginia, Pioneer Health Services in Patrick County and Wellmont Mountain View Regional in Norton City (inside Wise County), per the report.
For the study, the commission's staff used two models to assess the financial status of Virginia's rural hospitals.
One used the framework developed by the Center for Healthcare Quality and Payment Reform; the other was the Financial Distress Index from Cecil G. Sheps Center for Health Services Research at the University of North Carolina.
Under the CHQPR framework, 13 rural hospitals face an immediate risk of closing or could shutter their doors.
The UNC Sheps Center's FDI model finds that 12 rural hospitals in Virginia are either at the highest risk of experiencing distress or are considered in the mid-highest risk of facing distress.
When taken together, Alam said that the models identify "seven rural hospitals in Virginia that are at highest risk of either financial distress or closure."
Consolidated list of at-risk Virginia rural hospitals
- Bon Secours Southampton Memorial Hospital
- Bon Secours Southern Virginia Medical Center
- Carilion Giles Community Hospital
- Carilion Tazewell Community Hospital
- Sentara Halifax Regional Hospital
- VCU Health Community Memorial Hospital
- VCU Health Tappahannock Hospital
The health systems that oversee these hospitals, apart from VCU Health, reacted to VPM News questions about the report with a mix of caution and optimism.
"The challenges facing rural healthcare are not new. In recent years, however, those headwinds have intensified," a Bon Secours spokesperson told VPM News in an email. "We are continually monitoring this shifting landscape and remain committed to addressing these challenges thoughtfully and responsibly, with the goal of preserving access to care for the communities we serve."
Don Halliwill, executive vice president and CFO for Carilion Clinic in Roanoke, said that the nonprofit organization is used to working with "tight operating margins" and is closely monitoring HR 1, the "One Big Beautiful Bill."
However, he added that it would be premature to speculate on the federal law's impact.
"The state taking action to strengthen Medicaid is vital to protect access to healthcare, support local economies, and sustain rural and safety net hospitals that serve as major employers and essential community infrastructure," Halliwill said.
Mike Kafka, a Sentara spokesperson, said the system has no plan to shutter Sentara Halifax Regional Hospital. (Both study frameworks include it as a facility in the highest echelon of distress.)
"In fact, in January Sentara Halifax Regional Hospital marked a major milestone in the construction of its new hospital with a traditional topping-off ceremony celebrating the placement of the final steel beam atop the new structure, which is being built to meet the needs of the community for decades to come," Kafka said. That structure is expected to open in mid-2027.
Julian Walker, vice president of communications with the Virginia Hospital and Healthcare Association, said VHHA estimates show the HR 1 provisions will cost all Virginia hospitals more than $2 billion a year.
In a phone interview, Walker told VPM News that rural hospitals have faced closure concerns years before the federal law's passage.
"But HR 1, because of its changes to federal health policy and funding, have the very real and concerning potential that they will magnify those existing challenges, and those are very real complicating factors for hospitals," Walker said.
Walker added that another significant challenge for rural providers is that government programs such as Medicaid and Medicare reimburse below the cost of care. And compared to other hospitals, rural facilities treat a higher proportion of patients covered by Medicare and Medicaid.
"So every time a hospital sees a Medicaid patient or a Medicare patient, what they're paid for providing care to that patient is less than it actually cost them to provide that care," Walker said.
The Virginia Hospital and Healthcare Association estimates show the HR 1 provisions will cost all Virginia hospitals more than $2B annually.
Despite the ongoing concerns, the central pattern in rural healthcare has not been widespread closures but the shrinking of inpatient services coupled with a growing reliance on outpatient and emergency care.
"This allows rural hospitals to remain physically embedded in their communities, but their ability to receive inpatient admissions, deliver babies, or undergo routine surgical procedures locally continues to diminish in many areas throughout the state," Alam told the commission.
Commission staff reviewed 10 years of the most recent available financial and operational data for these hospitals, ending with the state 2024 fiscal on June 30, 2024.
Over the 10-year period, Alam said that obstetric care — which includes prenatal care and childbirth — "has declined most consistently, with elimination of most existing obstetric services across the seven hospitals and growth at just one hospital."
But other services have also faced cuts including; orthopedics, neurology, and ear, nose, and throat surgery.
Walker said he doesn't have a crystal ball on whether any hospital will close, but noted that Lee Regional Medical Center in Pennington Gap, which closed in 2013, later reopened as Lee County Community Hospital.
"Hospitals in Virginia, including rural hospitals, have shown incredible resilience and have been able to adapt and evolve in the face of a lot of changes, whether it's COVID or other policy changes on the state or federal level," Walker told VPM News.
While commission members acknowledged they need to wait longer to see how HR 1 impacts Virginia hospitals, Del. Willett raised the alarm on the federal funding expected to be lost once Medicaid provisions take full effect in 2028.
"We got a crisis," he said after the presentation. "It's troubling, and people say, 'Well, yeah, but these hospitals, every one of them is affiliated with a larger system.' I sit on the board of one of those systems, VCU Health. I can tell you the impacts coming from HR 1, affect all systems, whether you're big or small, because of the funding cuts."
The commission asked staff to continue to look at the issue and come up with potential policy solutions for legislators to consider.
CHQPR's list of at-risk rural hospitals
Immediate risk of closure
- Bon Secours Southampton Memorial Hospital
- Carilion Giles Community Hospital
- Carilion Tazewell Community Hospital
- Sentara Halifax Regional Hospital
- VCU Health Tappahannock Hospital
At risk of closure
- Ballad Health Dickenson Community Hospital
- Ballad Health Smyth County Community Hospital
- Bath Community Hospital
- Bon Secours Rappahannock General Hospital
- Bon Secours Southern Virginia Medical Center
- Duke Lifepoint Twin County Regional Hospital
- HCA LewisGale Hospital Pulaski
- VCU Health Community Memorial Hospital
UNC Financial Distress Index list of at-risk rural hospitals
Highest risk of distress
- Bon Secours Southampton Memorial Hospital
- Bon Secours Southern Virginia Medical Center
- Carilion Tazewell Community Hospital
- VCU Health Community Memorial Hospital
Mid-highest risk of distress
- Ballad Health Dickenson Community Hospital
- Bon Secours Rappahannock General Hospital
- Bon Secours Southside Community Hospital
- Buchanan General Hospital
- Carilion Giles Community Hospital
- Duke Lifepoint Twin County Regional Hospital
- Sentara Halifax Regional Hospital
- VCU Health Tappahannock Hospital
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