With all the recent headlines, you probably didn’t notice a growing trend: Hospitals are shutting down at an alarming rate. Becker’s Hospital Review reports since the start of 2025, 10 inpatient hospitals have closed.
With 13 hospitals closing in 2023 and 25 more closing in 2024, we’re currently on pace to have 36 hospitals close in 2025. So, what’s going on, and more importantly, what does this mean for insurance agents like you?
Why Are Hospitals Closing Now?
The same Becker’s Hospital Review answers this question, reducing it to a lack of money, staffing, and changing healthcare trends.
- Financial Problems
Many hospitals face the perfect financial storm of rising costs and low insurance reimbursements. Last week’s article about the “Rural Healthcare Crisis” focuses on rural hospitals, but these same pressures are felt everywhere in America.
Hospitals are beginning to cope with the storm by reducing staff. Becker’s Hospital Review reports on staff reductions occurring across the country.
When staff reductions no longer work, the next option is closing down.
- Staffing Shortages
Hospitals aren’t immune to the shortages we discuss in our article “The Growing Pandemic of Healthcare Provider Shortages.” There aren’t enough doctors, nurses, or support staff to run these facilities properly.
Then the hospital cuts staff and things worsen, adding more burnout for existing staff who must cover holes and making it harder to retain them. Keeping current revenue flow is much more challenging as these hospitals don’t have enough staff to maintain patient care and service.
Adding new patients to generate new revenue is almost impossible, as there is no additional staff available for new care or services.
- Fewer Patients Staying Overnight
Inpatient hospitals are seen by insurers as cost centers. In response, insurers want more inpatient care to shift to lower-cost outpatient centers and urgent care. When fewer people need overnight stays, hospitals lose revenue.
Possible Solutions?
- Expand Outpatient and Preventative Care
Expanding outpatient services, urgent care centers, and preventative care transforms inpatient hospitals from a “cost center” to a “care partner” for insurers. This action fundamentally shifts this pivotal relationship from an “adversarial” to a “collaborative” one.
Insurers can direct care and revenue to inpatient options for outpatient, urgent care, and preventative services.
- Boosting Inpatient Hospital Workforce
In addition to better pay and improved working conditions, student loan forgiveness programs, direct partnership programs with medical schools, and other provider certification programs can facilitate employment and attract and retain hospital medical staff.
- Encouraging Public-Private Partnerships
Our “Rural Healthcare Crisis” article mentions collaborations between public-private partnerships to address the rural healthcare crisis. This collaboration will need to create sustainable healthcare solutions in high-risk areas like low-income urban areas, where revenue challenges exist for inpatient hospitals that are similar to the rural sector.
How This Affects Insurance Agents
What does this mean for you as an insurance agent or broker? Hospital closures shake up the healthcare landscape, creating new coverage and care concerns for your clients. Here’s what you can do to help:
- Guide Clients Through the Shift to Outpatient Care
With fewer hospitals, more people will rely on outpatient clinics and urgent care. Help clients find insurance plans with solid benefits for these services, a great provider network in their area, and a great telemedicine program, too.
- Prepare Clients for Rising Healthcare Costs
When hospitals shut down, the remaining ones often get busier and charge more. These same surviving hospitals will also charge more to generate more revenue.
Insurers will respond to the higher costs inpatient hospitals charge with higher premiums, deductibles, and copays. Be ready to explain these changes and help clients find other solutions to cover these higher costs.
- Sell More Supplemental Coverage
Hospital indemnity plans, critical illness coverage, and accident insurance are great solutions to present clients. When you contact them, ensure the client you have these solutions that fit their needs and circumstances.
- Keep Employers Informed
If you sell group benefits, your employer clients must know how hospital closures impact their employees. Talk with them about adjusting their plans to maintain a robust provider network to meet network adequacy requirements on their plans.
- Know What Alternative Care Options Are Available to Clients
More hospitals will close, so you need to be ready with care alternatives your clients can access. These options could be concierge medicine or direct primary care memberships available in their areas. You can partner with them to direct them to care options if needed.
Hospital closures are reshaping healthcare in a big way and are expected to continue, so insurance agents are in a prime position to successfully navigate clients through these changes. Stay close to Agility for the latest news on inpatient hospital closures and other news impacting financial status.
Our national insurance product portfolio provides agents with coverage solutions, empowering clients to successfully navigate these closures and the higher costs they generate. Agents can access these options on our contracting page.
Contact Agility now at (866) 590-9771 or email [email protected] to find the specific coverage solutions your clients need to meet their particular needs and concerns. Agility can also add you to our free weekly email list for tips and vital information!
