Pennsylvania’s rural hospitals had a stronger financial year in 2025 than the previous year, but more than one-quarter of facilities still operated at a loss as uncompensated care and other cost pressures continue to challenge providers across the Commonwealth.

The findings come from a new analysis by the Pennsylvania Health Care Cost Containment Council (PHC4), which examined the financial condition of the state’s 63 general acute care hospitals located in rural counties.

While rural hospitals collectively improved their operating margins in FY25, 17 hospitals, or 27 percent, reported operating losses.

The findings come amid growing concern about the financial stability of Pennsylvania hospitals. An earlier report published in January by the Hospital and Healthsystem Association of Pennsylvania (HAP), which the PA Chamber previously reported on, warned that as many as 14 Pennsylvania hospitals could close over the next five years without policy changes.

That report identified hospitals serving large numbers of Medicaid, Medicare, and uninsured patients as especially vulnerable to payment shortfalls.

The new PHC4 data shows at least one of those pressures continuing to grow. Rural hospitals provided $192 million in uncompensated care in FY25, a 9.1 percent increase from the previous year. That includes bad debt and charity care from patients unable to pay their share of medical expenses.

At the same time, the overall financial picture for rural hospitals improved. Collectively, providers saw an 8 percent increase in net patient revenue, and their average total margin increased during the year. But 24 percent still reported negative total margins.

The report points to several ongoing challenges for rural providers, including lower patient volumes, aging populations, staffing shortages, and the costs associated with maintaining specialized services.

Medicaid reimbursement also remains a major concern. HAP’s January report cited an analysis showing Pennsylvania’s Medicaid reimbursement rate is 11 percentage points below the national average, with hospitals receiving an average of 71 cents for every dollar spent providing care to Medicaid enrollees.

The PA Chamber has advocated for reforms to reduce costs for health care providers, including ending the practice of “venue shopping” in medical malpractice cases, which increases liability costs and adds financial pressure to hospitals.

For rural communities, the stakes extend even beyond access to medical care. Hospitals are major employers and economic anchors, making their financial stability an important part of the broader business climate.

The PHC4 report does not show that Pennsylvania’s rural hospitals are uniformly in crisis. Instead, the data reveals that rural hospitals are collectively in better financial shape, but a significant share of them remain vulnerable.

That distinction will be important as policymakers consider how to preserve access to care while addressing the structural financial pressures facing Pennsylvania’s rural providers.

PHC4 is an independent state agency established that collects and analyzes data on hospital costs, patient care quality, and medical service use across the state. PA Chamber Vice President of Government Affairs Neal Lesher is an appointed member of the group’s council.