Pennsylvania’s Hospital Crisis: Why So Many Are Closing
- Pennsylvania has seen several hospital closures in 2025, with reports of more facilities facing financial instability.
- Low Medicaid reimbursement and increased legal exposure are likely major factors driving shutdowns.
- Both nonprofit and private hospital systems are contributing to the statewide consolidation trend.
- Reports say nurses are facing workforce changes, potential staffing adjustments, and increased workload pressures as facilities close.
- Lawmakers are proposing new transparency measures to address hospital mergers and protect community access to care.
Pennsylvania’s healthcare system is under increasing financial and workforce strain, sources say. In 2025, multiple hospitals have closed or scaled back operations, and several more are at risk of following suit.
Crozer-Chester Medical Center and Taylor Hospital, both part of Crozer Health and formerly owned by Prospect Medical Holdings, have announced closures, affecting roughly 2,600 healthcare workers, including many nurses. Heritage Valley Health System also closed Kennedy Hospital (formerly Ohio Valley) after citing low patient volumes and unsustainable Medicaid reimbursement rates.
Other health systems, such as Penn Highlands Healthcare, have scaled back inpatient services at facilities like Mon Valley and Connellsville hospitals and eliminated positions. Over the past decade, about a quarter of Pennsylvania’s rural hospitals have either closed or drastically reduced services. According to the Hospital and Healthsystem Association of Pennsylvania (HAP), approximately 34% of rural hospitals are considered “at risk of closing.”
A Growing Concern Among Lawmakers and Healthcare Leaders
At a recent legislative hearing on hospital sustainability — held on March 10, 2025, at Neumann University — lawmakers, healthcare professionals, and policy advocates examined the consequences of hospital closures across Pennsylvania.
The hearing, led by Senator Nick Miller, was titled Healthcare Accessibility and Hospital Closure Impacts. Miller emphasized the urgency of protecting community access to care, particularly in light of Crozer Health’s potential closure:
“We must work together to ensure all residents in the Commonwealth can receive healthcare within their communities,” Miller said.
Other senators echoed similar concerns. Senator John Kane pointed to Prospect Medical Holdings as a contributor to hospital instability, saying:
“The predatory practices of Prospect Medical and private equity firms like it in healthcare have put both essential medical services and healthcare jobs at risk in our community.”
Senator Anthony Williams warned that Crozer-Chester’s potential closure could create a “dangerous healthcare desert” in Delaware County. Senator Amanda Cappelletti added that corporate mismanagement and financial exploitation have forced many hospitals to close, reducing access to life-saving care.
Financial Pressures Behind the Shutdowns
Pennsylvania’s hospital crisis didn’t appear overnight. Many analysts trace it to aggressive expansion and acquisition strategies over the past 10 to 15 years. Health systems purchased hospitals at high valuations, expecting continued growth — but when those profits failed to materialize, some facilities were sold or shuttered, leaving communities without local care.
The Medicaid reimbursement gap is another major driver. Pennsylvania hospitals are reimbursed at roughly 80 cents for every dollar spent on Medicaid patient care — among the lowest rates in the nation, according to the Commonwealth Fund and HAP. For hospitals already operating on thin margins, that shortfall quickly becomes unsustainable.
Legal costs have also surged. A 2023 change to Pennsylvania’s medical malpractice “venue rule” now allows plaintiffs to file cases in jurisdictions more favorable to them, such as Philadelphia County. Hospital leaders say this “venue shopping” practice has raised litigation expenses and created new financial uncertainty.
According to HAP President and CEO Nicole Stallings, protecting healthcare access requires more than mergers or acquisitions. She urged lawmakers to raise Medicaid reimbursement levels and increase funding for mental health services, which could ease pressure on emergency departments.
The Role of Private Equity
During the March 10 hearing, Mary Bugbee, Healthcare Research and Campaign Director at the Private Equity Stakeholder Project (PESP), testified on how private equity investment has impacted Pennsylvania’s healthcare landscape.
Bugbee cited hospital closures such as Hahnemann University Hospital (2019) and the closing of inpatient and emergency services at Delaware County Memorial Hospital (2022) as examples of the risks of leveraged buyouts and profit-driven management. PESP research identified at least 13 hospitals in Pennsylvania currently under private equity ownership, along with hundreds of outpatient facilities, urgent care centers, and specialty clinics owned by PE-backed companies.
She outlined several tactics that have strained hospital finances:
- High leverage: loading hospitals with debt to finance acquisitions.
- Sale-leaseback transactions: selling property and leasing it back at high cost.
- Debt-funded dividends: extracting profits while leaving hospitals burdened with debt.
According to PESP, 21% of healthcare bankruptcies in 2024 involved private equity–owned companies, including seven of the eight largest cases. Bugbee called the trend “financial extraction, not investment,” warning that it puts both patients and workers at risk.
How Hospital Closures Impact Nurses
Hospital closures have far-reaching consequences for nurses, affecting employment, workload, and safety. As facilities shut down or consolidate, many nurses face job loss or must commute farther for work. Those who remain often experience heavier patient loads and fewer resources, which can lead to burnout and turnover.
In rural areas, closures force patients to travel long distances for care, increasing the complexity of transfers and reducing timely access to treatment. These factors compound the state’s existing nursing shortage and contribute to emotional and professional strain.
Despite these challenges, nurses continue to adapt and advocate — taking on leadership roles, pushing for policy change, and finding innovative ways to deliver care under difficult conditions.
What’s Next for Pennsylvania’s Healthcare Workforce
The crisis has sparked bipartisan concern. State Representative Lisa Borowski has introduced legislation that would require both nonprofit and for-profit hospital systems to report proposed mergers and acquisitions to the Pennsylvania Attorney General before finalizing them — aiming to improve transparency and oversight.
New nonprofit organizations such as Tenor Health Foundation are stepping in to stabilize struggling hospitals. Tenor recently acquired and reopened Sharon Regional Medical Center, which had closed in 2024, and plans to purchase additional facilities in the state.
Still, the outlook remains uncertain. Financial strain, workforce shortages, and an increasingly challenging legal environment continue to threaten access to care.
As Kristen Rodack, Executive Deputy Secretary of the Pennsylvania Department of Health, stated: “These providers cannot be a pawn in a for-profit buy, sell, lease system as we’re seeing – the ramifications are too serious on real people’s lives and livelihoods,” she said.”
Pennsylvania’s ongoing hospital closures reflect a complex mix of financial, legal, and workforce pressures. Without stronger oversight and policy reform, more communities could lose local access to care — and nurses will continue to bear the brunt of the fallout.
Amid this turbulence, nurses remain the backbone of a healthcare system in transition — adapting, advocating, and continuing to show up for their patients every day.
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