More than a dozen Alabama hospitals at immediate risk of closing; officials say hospitals suffer $1.5 billion loss

BIRMINGHAM, Ala. (WBRC) - More than a dozen Alabama hospitals are at an immediate risk of closing as state health leaders report facilities lost more than $700 million in 2022.

“Alabama hospitals have consistently lost money each of the three years,” Dr. Don Williamson with the Alabama Hospital Association said. “In 2022, Alabama hospitals lost $738 million compared to their 2019 baseline.”

Dr. Williamson said even with federal relief money, Alabama hospitals have lost $1.5 billion dollars since the start of the pandemic.

“In 2021, they lost $600 million,” he said. “In 2020, first year of the pandemic, they lost $124 million.”

He said 25 hospitals are at risk of closing, but 15 are at an immediate risk. He said they are in rural parts of the state that are already under-represented in healthcare. But, Williamson said hospitals in urban areas are also at risk for closure.

“Our expenses are $2.6 billion more in 2022 than in 2019,” Williamson said. “Of that $2.6 billion, more than half, $1.4 billion, is labor cost. Hospitals have had to pay more for nurses and respiratory therapists.”

He said it wasn’t just the cost of travel nurses, but also raising salary for Alabama-based nurses to stay. Williamson said there are also issues with incoming revenue.

“Alabama has the lowest Medicare in the country,” Williamson said. “We have, for 19 to 64-year-olds, an uninsurance rate of roughly 13 to 15%. So, hospitals are dealing almost 1 and 6 or 1 and 7 of the people who come to them, are unable to pay for their healthcare. Add the combination of the uninsured, low Medicare reimbursement rates, and low third party reimbursement rates, our revenue can’t keep up.”

Williamson said the increase in patients who can’t pay is hurting bottom line, because they are also staying longer than ever before.

“In the ER, the patients who are coming are sicker than they were before the pandemic,” he said. “They are also more likely to be uninsured and self pay, so the combination of those factors has put us on a collision course for an absolute disaster.”

Williamson said while you may not see some hospitals close completely, you will likely see them close departments. He said many will work to cut back expenses and no longer offer different types of surgeries or services.

Williamson said the data comes from a recent Kaufmann Hall study of Alabama hospitals.

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