Rural towns build new hospitals with federal funding

After receiving federal funding, a remote Wyoming community is bucking the trend of closures in rural areas of the U.S. and building its own hospital. It’s not the only one.

Sarah Jane Tribble
| KFF Health News

In Pinedale, Wyoming, a town of about 2,000 people nestled in the foothills of the Wind River Mountains, a new morning ritual has emerged.

Friends and neighbors in the oil- and gas-rich community are “grabbing their morning coffee and driving over” to watch workers build the county’s first hospital, said Kari DeWitt, public relations director for the project.

“I think it’s just gratitude,” DeWitt said.

Sublette County is the only county in Wyoming — where counties stretch for thousands of square miles — without a hospital. The 10-bed, 40,000-square-foot hospital with a similarly sized, adjacent long-term care facility is scheduled to open in summer 2025.

DeWitt, who is also executive director of the Sublette County Health Foundation, has an office in the city clinic overlooking the construction site.

Pinedale residents have reason to celebrate. New full-service hospitals with patient beds are rare in rural America, where population declines have prompted decades of reductions and closures. But several communities in Wyoming and others in Kansas and Georgia are bucking the trend.

“Honestly, it seems strange even to me,” said Wyoming Hospital Association President Eric Boley. Small, rural “hospitals are really struggling all over the country,” he said.

There is no official tally of new hospitals being built in rural America, but industry experts like Boley say they are rare. Typically, rural health care construction projects are smaller urgent care centers or stand-alone emergency rooms or are replacements for older hospitals.

About half of rural hospitals lost money in the past year, according to Chartis, a health analytics and consulting firm. And nearly 150 rural hospitals have closed or become smaller since 2010, according to data compiled by the Cecil G. Sheps Center for Health Services Research at the University of North Carolina.

To stem the wave of closures, Congress created a new rural emergency hospital designation that allowed struggling hospitals to close their inpatient departments and provide only outpatient and emergency services. Since January 2023, when the program went into effect, 32 of the more than 1,700 eligible rural hospitals — from Georgia to New Mexico — have joined the program, according to data from the Centers for Medicare & Medicaid Services.

Tony Breitlow is the director of the health care studio at EUA, a national architecture and engineering firm whose work includes expanding, replacing or modernizing older buildings, many of which were built in the middle of the last century. The work, Breitlow said, is part of “health care systems figuring out how to stay strong and viable.”

Freeman Health System, based in Joplin, Missouri, announced plans last year to build a new 50-bed hospital across the state line in Kansas. Paula Baker, president and CEO of Freeman, said the system is being built for patients in the southeast corner of the state who travel 45 minutes or more to larger facilities in Joplin for care.

The new Freeman Hospital, set to begin construction this spring, will be less than 10 miles from an older, 64-bed hospital that has stood for decades. Kansas is one of more than a dozen states that does not have a “certificate of need” law that would require health care providers to get state approval before offering new services or building or expanding facilities.

Baker also said Freeman plans to run emergency services and a small, 10-bed facility in Fort Scott, Kansas, that will open early next year in a corner of the hospital that closed in late 2018. Residents “were crying, cheering, hugging me,” Baker said, adding that “the level of appreciation and gratitude that they felt and showed was overwhelming to me.”

Michael Topchik, executive director of the Chartis Center for Rural Health, said regional health systems in the Upper Midwest are competing especially aggressively for patients, including by building new hospitals.

And while private corporate money can drive construction, many rural hospital projects benefit from government programs, especially those supported by the U.S. Department of Agriculture, Topchik said. That, he said, “surprises a lot of people.”

Since 2021, USDA’s rural community facilities programs have awarded $2.24 billion in loans and grants to 68 rural hospitals for nonemergency or disaster work, according to data analyzed by KFF Health News and confirmed by the agency. The federal program is funded through a law often called the farm bill, which has a September renewal deadline by Congress.

Almost all projects involve the replacement, extension and modernization of older facilities.

The USDA confirmed that three new or planned hospitals in Wyoming have received federal funding. The hospital projects in Riverton and Saratoga received loans of $37.2 million and $18.3 million, respectively. Pinedale Hospital received a $29.2 million loan from the agency.

New construction in Wyoming is rare in a state where more than 80% of rural hospitals are expected to post losses in the third quarter of 2023, according to Chartis. Boley of the state association said he worries about several hospitals that have less than 10 days of cash on hand “day and night.”

The loan for the Pinedale project was approved after the community submitted a feasibility study to the USDA that included local clinics and a long-term care facility. “It’s pretty remote and high in the mountains,” Boley said.

DeWitt, of Pinedale, said the community lacks key services like blood transfusions, which are often necessary after a trauma like a car accident or when a pregnant woman has serious complications. Local ambulances traveled 94,000 miles last year, she said.

DeWitt began raising funds for the new hospital after her own pregnancy-related injury in 2014. She was bleeding heavily and came to a local clinic believing it was operating like a hospital.

“It was shocking to hear, ‘No, we’re not a hospital. We can’t do blood transfusions. We’re just going to have to pray you survive the next 45 minutes,'” DeWitt said.

DeWitt had to be airlifted to Idaho, where she gave birth minutes after landing. When hospital funding hit the ballot in 2020, DeWitt — fully recovered and with healthy school-age children at home — began making five phone calls a night to rally support for a county tax increase to help fund the hospital.

“By improving health care, I think we’re increasing everyone’s chances of survival. You know, that’s pretty basic,” DeWitt said.

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