Rural Hospitals Struggle as Costs Soar and Revenues Decline

Diversified income streams are now essential for survival, but help from Washington remains uncertain

Apr. 17, 2026 at 2:10pm

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An extreme close-up X-ray photograph revealing the intricate network of pipes, wires, and electrical components that power a hospital, conveying the complex inner workings that keep rural healthcare facilities operational.Hospitals' reliance on diversified revenue streams underscores the fragility of rural healthcare infrastructure as costs continue to rise.Washington Today

A new analysis shows America's hospitals, especially those in rural areas, are facing a financial crisis as patient revenue fails to keep pace with rising costs. Hospitals are increasingly relying on non-operating revenue sources like grants and investments just to keep their doors open, underscoring how the Affordable Care Act's policies have destabilized traditional hospital finances.

Why it matters

Hospital closures not only reduce access to care but also have a devastating impact on local economies that rely on these institutions as major employers and anchors of community life. The stakes are high, as hospitals represent the single largest share of U.S. healthcare spending and employ millions of Americans.

The details

According to the analysis, only about one-third of hospital revenue now comes from treating patients, with the rest cobbled together from grants, investments, and other non-operating sources. This dependence on outside revenue is a result of policies that have cut Medicare reimbursements, slashed federal payments to hospitals treating uninsured patients, and buried providers under costly new regulations. The 340B Drug Pricing Program has been a crucial stabilizing force, allowing eligible hospitals to 'stretch resources and reduce medication costs for patients' and subsidize care for the poor and underinsured.

  • In 2010, the cost to produce a one-liter bag of saline was $0.46, but by 2013 it had more than doubled to $1.07, and recent estimates place it around $2.00.
  • In 2021, the average energy cost for a hospital was $3.16 per square foot, rising to $3.75 shortly thereafter, largely due to higher rates from energy companies rather than increased usage by hospitals.

The players

Trilliant Health

A healthcare market intelligence firm that conducted the analysis on the financial challenges facing hospitals.

George H.W. Bush

The Republican president who created the 340B Drug Pricing Program in 1992.

Orrin Hatch

The Republican senator who co-created the 340B Drug Pricing Program.

Donald Trump

The Republican president who protected the 340B program through ceiling price rules for drugs in the program.

Joe Grogan

A former Trump White House policy advisor with ties to the pharmaceutical industry who acknowledged that dismantling the 340B program would put hospitals 'under pressure'.

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What they’re saying

“Even Joe Grogan, a former Trump White House policy advisor with ties to the pharmaceutical industry, has acknowledged that if 340B is dismantled, hospitals 'are going to be under pressure' and the federal government 'doesn't have the money to shore up the community hospitals.'”

— Joe Grogan, Former Trump White House policy advisor

What’s next

Efforts to weaken or dismantle the 340B program could further jeopardize the financial stability of rural hospitals that rely on the program's discounts to subsidize care for the poor and underinsured.

The takeaway

The financial challenges facing hospitals, especially in rural areas, highlight the need for policymakers to find solutions that preserve access to care and support local economies, rather than pursuing policies that further destabilize the healthcare system.