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Welcome to \u201cTrump\u2019s Beautiful Disaster,\u201d a pop-up newsletter about the Republican tax and spending bill, one of the most consequential pieces of legislation in a generation.\u00a0<\/em>Sign up for the newsletter<\/em><\/a>\u00a0to get it in your in-box.<\/em><\/p>\n As we at the Prospect<\/em> have reported, while the Senate\u2019s version of the Republican budget reconciliation bill was widely expected to be more moderate than the House one, when it comes to health care it is more extreme<\/a>. This came as a surprise to many Republicans, some of whom now want changes. And they all are highlighting the same area of concern<\/a>. It would be \u201cpotentially really bad for rural hospitals,\u201d Sen. Josh Hawley (R-MO) told The Wall Street Journal<\/em>. It\u2019s \u201cgoing to hurt our rural hospitals and hurt them in a big way,\u201d said Sen. Jim Justice (R-WV). Sen. Susan Collins (R-ME) expressed \u201cconcerns about the effect on rural hospitals in her state.\u201d<\/p>\n This is all certainly true. Senate cuts to the provider tax<\/a>, a way for states to get more federal funding for their Medicaid programs, along with the House cuts that have been analyzed as leading to at least 11 million fewer people on the Medicaid rolls, will deeply harm the 700-plus rural hospitals already at risk of closure<\/a>.<\/p>\n But that\u2019s too narrow a frame. The entire health care provider network would come under heavy strain, and possibly collapse.<\/p>\n Read more \u201cTrump\u2019s Beautiful Disaster\u201d<\/em><\/strong><\/a><\/p>\n That\u2019s because each node of the system is interdependent. If the 190 rural hospitals estimated<\/a> in a recent Center for American Progress report as collateral damage of the Republican cuts close, all of their patients must find treatment at the remaining health care providers. Many of these new-arrival patients are likely to be uninsured (many thrown off Medicaid or Obamacare by Republicans), crushing hospital finances and potentially adding more closures on top.<\/p>\n This means overcrowded hospitals and overburdened staff, in addition to the serious hardships for patients traveling long distances for care. \u201cThe Republican Senate budget accelerates the rural hospital collapse that is under way, like jet fuel on a fire,\u201d said Alex Lawson of Social Security Works, who works directly on health care issues in Washington. \u201cHospitals that don\u2019t close will be the ones people drive four hours to access. The quality of everybody\u2019s health care in this country will plummet.\u201d<\/p>\n HOSPITALS HAVE LURCHED FROM ONE CRISIS<\/strong> to the next for years. Between the 2020 COVID pandemic and 2024, 36 rural hospitals closed<\/a>, on the heels of 136 closures<\/a> in the previous decade. Another 16 have closed this year<\/a>, suggesting an acceleration of the trend, and hundreds more are at risk<\/a>.<\/p>\n If the entire hospital doesn\u2019t close, unprofitable business lines are often shuttered first. \u201cI\u2019ve talked to a lot of hospitals worried about having to close maternity wards,\u201d said Chiquita Brooks-LaSure, who ran the Centers for Medicare & Medicaid Services (CMS) in the Biden administration. In California alone, 56 hospitals have ended maternity care<\/a> since 2012, and the crisis of maternity deserts is acute.<\/p>\n The situation is worse, Brooks-LaSure said, in states that haven\u2019t expanded Medicaid, suggesting that the program is a lifeline for hospitals, supplying a steady stream of paid claims for insured patients. Indeed, Medicaid is often the biggest line item in the accounts receivable budgets for nursing homes, rural hospitals, and maternity wards, as Families USA\u2019s Anthony Wright pointed out<\/a> to The Bulwark. A letter<\/a> to the Republican leadership citing data from the Sheps Center for Health Services Research at the University of North Carolina notes that 213 rural hospitals serve a disproportionately high share of Medicaid patients.<\/p>\n While hospitals sometimes complain about low Medicaid reimbursement rates, the government has in the past compensated for that with \u201cstate-directed payment\u201d arrangements that boost levels to what commercial insurance pays. That is being attacked in the Senate Finance Committee version of the bill, cutting those reimbursement top-ups to Medicare levels.<\/p>\n Hospitals are legally required to take care of patients in an emergency, regardless of their ability to pay. And more emergencies occur when more people are uninsured and put off care until they absolutely need it, which are made worse still if patients have to travel for hours to get care. Uncompensated care builds up in states with larger proportions of their populations who are uninsured, severely damaging hospital budgets.<\/p>\n Taking nearly $1 trillion out of the health system will magnify that problem across the country. And Medicaid cuts that create more uninsured patients, along with the creation of potentially millions of uninsured<\/a> through Affordable Care Act changes, are terrible for hospitals. According to the Robert Wood Johnson Foundation, uncompensated care would increase by $204 billion<\/a> over the next decade if the House version of the bill passed; remember, the Senate bill is even worse. Much of that burden would be thrown onto already shaky hospitals.<\/p>\n To those who argue that the cuts are really to state Medicaid programs and not hospitals, the ways states will deal with those cuts is not likely to be through simply providing more money that they don\u2019t have. They will either change enrollment rules, so fewer people stay on the program, or cut reimbursement payments to hospitals and other providers. Both of these options would directly harm hospital finances.<\/p>\n \u201cThese cuts will strain emergency departments as they become the family doctor to millions of newly uninsured people,\u201d said Rick Pollack, president and CEO of the American Hospital Association, in a statement<\/a>, adding that \u201cthe proposal will force hospitals to reconsider services or potentially close, particularly in rural areas.\u201d<\/p>\n BROOKS-LASURE EXPLAINED WHAT IT ACTUALLY MEANS<\/strong> when a hospital closes, recalling a closure when she was at CMS. \u201cThe first thing we had to do is make sure people in that hospital are moved to somewhere they can get care. You might have people in serious situations, and moving them is a life-threatening proposition.\u201d<\/p>\n Another factor is how the loss of an anchor hospital affects local economies. A hospital can be the biggest employer in a small town. If it closes, the entire town can wither away, straining local and regional finances and burdening the residents who don\u2019t have the resources to move.<\/p>\n Over the longer term, the closure of rural hospitals forces patients to spend hours getting to the nearest care center, and in some cases leaves them without access at all. \u201cI was in Colorado and we drove from one part of the state to the other to get to a hospital,\u201d LaSure explained. \u201cThey said to me, \u2018The road you drove over, one out of three days of the year you can\u2019t get over that road,\u2019\u201d due to weather or some other complication. When the nearest hospital is across the Rockies and it\u2019s snowing, you really have no ability to get care.<\/p>\n Being hours away from a hospital also means that families are more likely to avoid routine care. And in emergency events like heart attacks or accidents, distance can be the difference between life and death.<\/p>\n People will eventually do what it takes to get medical treatment if they need it. That means families weathering hardships like having to pay to stay overnight near a hospital that\u2019s far from home, or dropping off a loved one and not being able to visit them during an extended hospital stay.<\/p>\n This also means the hospitals that are allegedly \u201csafe\u201d from cuts will feel the effects. They will have more patients, and more uninsured patients, to deal with. And they cannot handle the numbers they see now. There is already a projected shortage of over 187,000 physicians<\/a> over the next decade, according to a November 2024 report of the National Center for Health Workforce Analysis.<\/p>\n \u201cThere\u2019s no escaping this,\u201d Lawson said. \u201cThe health system is super-complex. You can\u2019t do something in one side and expect it\u2019ll have no effect in the other.\u201d<\/p>\n MANY IN THE HEALTH PROVIDER COMMUNITY<\/strong> have been raising alarms about the Republican bill. America\u2019s Essential Hospitals, a coalition of over 300 safety-net hospitals, forwarded a message to the Prospect<\/em> from its CEO Bruce Siegel, who said that \u201cthe cuts would threaten the health and well-being of millions of Americans and harm the essential hospitals that serve as community lifelines.\u201d State hospital associations, in a letter to Senate leaders<\/a>, noted that some of the payments the Senate Finance Committee attacked make up 20 percent of a hospital\u2019s overall revenue.<\/p>\n As Jonathan Cohn points out<\/a>, the hospitals at most risk of closure are primarily in communities dominated by Republicans at the district level. But Democratic areas are at risk as well. House Minority Leader Hakeem Jeffries (D-NY) led a \u201cSave Our Hospitals\u201d action yesterday at a hospital in Brooklyn. And in Los Angeles County, over 40 percent of the population is enrolled in Medi-Cal, the state\u2019s Medicaid program, according to analysis from the Berkeley Labor Center<\/a>.<\/p>\n Rep. Chris Deluzio (D-PA), who represents portions of rural communities outside of Pittsburgh, said he\u2019s been hearing from hospital groups in his state. \u201cThey are struggling as it is,\u201d he said. \u201cIf these Medicaid cuts happen, facilities and services will be on the chopping block, not just in my district but all over Pennsylvania.\u201d<\/p>\n