Walk into a grocery store, pick up a loaf of bread marked $1, hand the cashier 30 cents and walk out. Now imagine the store is legally required to serve every customer who comes through the door, regardless of what they can pay. That’s the economic reality facing Indiana’s rural hospitals today.
At Community Hospital of Bremen (CHB), insurance companies and government programs, like Medicare and Medicaid, routinely reimburse us at rates that don’t cover the actual cost of care. Yet we continue to serve patients, regardless of their ability to pay, because rural hospitals like CHB aren’t just serving our individual communities — we are essential infrastructure keeping Indiana’s entire health-care system functioning.
And that infrastructure is at risk of collapsing unless our state lawmakers take action.
CHB handles routine surgeries, diagnostic tests and emergency care that would otherwise flow to Memorial Hospital of South Bend, our region’s only Level II trauma center. When one of our patients needs an echocardiogram, they may wait three weeks. A routine cardiology appointment may take three to four months.
Without rural hospitals absorbing such routine care, urban medical centers would be overwhelmed. That specialist appointment you’re waiting three months for becomes six months when rural hospitals are forced to cut services and their patients shift to urban centers.
This scenario is not unique to CHB, which is why Indiana’s rural hospitals are at a tipping point.Over the next decade, hospitals across the state face $12.7 billion in reimbursement cuts underthe One Big Beautiful Bill Act. For rural facilities already operating on razor-thin margins, thesereductions will accelerate service closures and, in some cases, complete shutdowns.
We’ve already seen the warning signs: a quarter of Indiana’s rural hospitals have cut services, starting with obstetrics, and only half of our 92 counties have inpatient OB services. Yet CHB has maintained its OB services because of our affiliation with Beacon Health System and the economies of scale it provides.
Rural hospitals face a fixed-cost problem that urban facilities don’t experience. Whether we see10 emergency department patients or 100, we still need a physician available 24/7. Whether we perform five surgeries or 50 per month, we still need to staff an operating room.
Operating on thin margins means one or two additional surgeries per month makes a substantial difference to sustainability. There’s no cushion for unexpected equipment failures or volume fluctuations that larger hospitals can absorb.
As part of Beacon, CHB also benefits from operational support that independent rural hospitalsstruggle to achieve. Of Indiana’s 33 critical access hospitals, 22 (67%) have affiliated with largersystems for exactly this reason. But even with system advantages, reimbursement rates fail tocover the actual cost of delivering care in rural communities.
A critical window for action
Indiana policymakers have recognized rural health care challenges. Indiana has been awarded$206.9 million in first-year funding under the federal Rural Health Transformation Program, which was designed to help offset unsustainable Medicaid cuts that are soon to take effect, disproportionately impacting rural hospitals. But unless those dollars flow directly to hospitals as intended, and unless Indiana enacts permanent reimbursement reforms, these funds will be nothing more than a temporary patch on a widening gap.
When CHB handles routine care locally, Memorial Hospital’s specialists can focus on complexcases requiring Level II trauma expertise. When patients can get an MRI in Bremen rather thantraveling to South Bend, it frees up urban capacity for patients who have no other option.
But when reimbursement rates decline, as they’re scheduled to do starting in 2028, ruralhospitals face impossible choices about which services to cut. Each service eliminated meansmore patients traveling to urban centers, longer wait times systemwide, and reducedhealth care access for everyone.
Reimbursement reform isn’t about profit — it’s about survival. Rural hospitals cannot keepemergency rooms open, maintain surgical capacity, or provide OB care when paymentscontinue to fall below the cost of care. Without action, Hoosiers in rural communities will loseaccess to essential services, and the ripple effect will strain the entire health care system.
However, lawmakers have an opportunity this session to pass meaningful legislation to coverthe true cost of rural health care delivery. This will ensure that rural hospitals remain viable, thatsystem partnerships like Community Hospital of Bremen’s with Beacon Health System cancontinue providing essential services, and that every Hoosier has reasonable access to healthcare.
David Bailey is president of Community Hospital of Bremen.
This article originally appeared on South Bend Tribune: Rural Hoosier hospitals need a legislative lifeline | Opinion
Reporting by David Bailey, Guest columnist / South Bend Tribune
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