Beth Kelley spent most of her life working at Sturgis Hospital. For 32 years, the nurse said it was \u201cunusual to walk down the hall and not recognize somebody.\u201d The independently owned hospital had served its community in rural St. Joseph County for more than a century.<\/p>\n
\u201cI like the small hospital atmosphere,\u201d Kelley, 56, told Bridge Michigan. \u201cI know this is maybe a little clich\u00e9, but it\u2019s like family.\u201d<\/p>\n
When administrators held a town hall last month to tell staff the hospital would close about 70 hours later, Kelley said the room filled with \u201cshock\u201d and \u201cdevastation.\u201d The decision left many long-serving employees like herself \u201cscrambled trying to find a job\u201d while they worked their remaining shift hours.<\/p>\n
Sturgis Hospital shuttered its doors June 19, citing \u201cyears of ongoing financial challenges\u201d facing rural health care providers. The facility had 84 licensed beds and about 300 associates working, according to the hospital. <\/p>\n
There were warning signs. The facility had been winding down services<\/a> in recent years, even as it obtained a city-issued pandemic relief loan<\/a>, a state lifeline<\/a> and new federal status \u2014 Sturgis Hospital became Michigan\u2019s first designated rural emergency hospital<\/a> in 2023, which allows for increased support from the US Centers for Medicare & Medicaid Services.<\/p>\n It\u2019s not the only rural hospital in Michigan to be impacted by a shifting health care landscape<\/a>. These health care facilities, sometimes the only medical care providers available for miles, have been navigating several problems, including declining payer reimbursements<\/a>, rising operating costs<\/a>, and a federal reworking of Medicaid and Medicare<\/a> \u2014 programs used by the bulk of patients in rural hospital settings.<\/p>\n For Kelley and others, the Sturgis Hospital closure is part of a bigger trend and serves as a wake-up call for her and others in the field.<\/p>\n \u201cAs a nurse, we took care of patients, and that\u2019s all we did. It\u2019s all we cared about. We didn\u2019t care about the financial end of it,\u201d Kelley said. \u201cThose days are gone.\u201d<\/p>\n Service cuts<\/p>\n Rural hospital closures, reductions, restructuring and consolidation dominate the contemporary health care landscape in Michigan, according to researchers, physicians and policy advocates working in the field. <\/p>\n For one thing, Michigan\u2019s population is aging, which puts strain on the state\u2019s health care system<\/a>. In addition, many point to problematic payment models that don\u2019t offset costs for service, and federal program reductions outlined in HR 1 \u2014 the \u201cOne Big Beautiful Bill.\u201d<\/p>\n Five rural hospitals have closed in Michigan since 2005, according to the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill.<\/p>\n As Congress debated the One Big Beautiful Bill last year, the Sheps Center estimated four of 63 rural hospitals in Michigan could be at risk for closure<\/a>, highlighting facilities that had run a three-year deficit or existed as one of the top Medicaid revenue earners in the country. Sturgis Hospital was not included.<\/p>\n <\/p>\n \n Sign up for Morning Wire: Even if a hospital does manage to remain open, many have to drop major parts of their operation to survive. Last year, the labor and delivery unit at Aspirus Ironwood Hospital<\/a> and the obstetrics unit at MyMichigan Medical Center in Tawas City<\/a> closed.<\/p>\n Rural birthing hospitals are costly and difficult to staff, according to Michael Shepherd, an assistant professor at the University of Michigan School of Public Health focused on rural health disparities and health policy in the US.<\/p>\n \u201cHalf of births in rural communities are being paid for by Medicaid at the moment,\u201d Shepherd told Bridge following passage of President Donald Trump\u2019s One Big Beautiful Bill, which calls for slashing Medicaid. \u201cSo what you\u2019re talking about is a not very profitable service line \u2014 it\u2019s very expensive and one that\u2019s about to face massive financial shortfalls.\u201d<\/p>\n Sturgis Hospital had closed its birthing center in 2018. Last month, it ended the remaining services nearby residents relied on \u2014 surgery, laboratory, medical imaging, physical therapy, endoscopy and cardiac rehabilitation services.<\/p>\n From 2 miles to 25<\/p>\n While other clinics exist to fill the gap, the absence of an emergency department in Sturgis has left facilities in Three Rivers, Coldwater and LaGrange, Indiana as the closest alternatives to patients.<\/p>\n That reality has a \u201csubstantial operational effect\u201d on the city\u2019s emergency medical services, according to Sturgis Director of Public Safety Ryan Banaszak. When ambulances leave their service areas, he said longer distances and travel times affect their ability to respond<\/a>.<\/p>\n \u201cWhat was once approximately a 2-mile transport for patients has now become closer to 25 miles, which takes ambulance personnel and equipment out of service for a much longer period of time,\u201d Banaszak said in an email.<\/p>\n It\u2019s more than distance for some patients \u2014 while Parkview LaGrange Hospital may be the closest drive from Sturgis at less than 20 minutes, low-income patients may still face obstacles finding medical coverage.<\/p>\n \u201cIf you are a Michigan Medicaid patient, you can\u2019t simply go across the border to another hospital,\u201d said Joe Gavan, CEO of Cass Family Clinic, a federally qualified health center operating in rural southwest Michigan. The loss of the Sturgis Hospital, he said, is \u201ca huge burden on the folks that are impacted the most.\u201d<\/p>\n Rebecca Burns, health officer of the Branch-Hillsdale-St. Joseph Community Health Agency, said she is \u201csaddened by the loss\u201d of the hospital. The public health agency continues to operate a site in Sturgis.<\/p>\n \u201cWe stand ready to continue to provide public health preventative services to residents as they need them,\u201d Burns said.<\/p>\n Another perspective<\/p>\n Dr. Andrea Wendling sees a pattern play across rural systems which lands patients in emergency rooms and causes hospitals to operate on tight margins.<\/p>\n \u201cPeople aren\u2019t doing the primary care and they\u2019re not doing the preventative care in between,\u201d said Wendling, a family doctor who practices at a clinic in Boyne City and serves as senior associate dean for academic affairs for the Michigan State University College of Human Medicine.<\/p>\n \u201cWhen they\u2019re not able to pay that bill and there\u2019s not insurance for them to pay, that\u2019s a loss for those hospitals, and they need to have a certain percentage of paying customers in order to be able to fund the service that they provide.\u201d<\/p>\n Wendling, who has spent much of her life living and working in rural hospital settings and ensuring its continued workforce, worries the Sturgis Hospital closure is \u201cthe first of more closings that we\u2019re going to see over the next few years\u201d in the state.<\/p>\n She said independent hospitals are pressured to join bigger systems for economic benefit: Acquisition allows for smoother negotiations with big insurance payers, stronger purchasing power and reduced administrative costs.<\/p>\n But acquisition is no guarantee of survival. Sturgis Hospital had been acquired by a health care company<\/a> in 2023, but city officials reported last August<\/a> the deal was slow to close \u201cby all indications.\u201d A representative from the company declined to comment.<\/p>\n \u201cDespite extensive efforts by hospital leadership and the Board of Directors to secure the hospital\u2019s future, including pursuing potential acquisition opportunities and partnerships, a sustainable path forward could not be achieved,\u201d Sturgis Hospital noted in its announcement. <\/p>\n The closure underscores the need for rural hospitals to use every tool for financial sustainability, including dollars from the 340B drug cost program<\/a> and \u201c swing beds<\/a>,\u201d according to Lauren LaPine-Ray, vice president of policy and rural health for the Michigan Health & Hospital Association. Under swing bed arrangements, hospitals can shift the use of their beds to provide either acute or post-acute care on an as-needed basis.<\/p>\n \u201cRural hospitals need sustainable policies that account for the unique challenges associated with providing care in communities with lower patient volumes, workforce shortages and populations that are older, sicker and more likely to rely on Medicare and Medicaid,\u201d LaPine-Ray said in an email.<\/p>\n Michigan has received a $173 million grant from the Rural Health Transformation Program<\/a>, but the federal initiative has been scrutinized by hospital leaders operating in the targeted areas<\/a>.<\/p>\n The Michigan Department of Health and Human Services has been criticized because under its grant funding criteria, some populous counties, including Wayne, Washtenaw and Oakland, would qualify as \u201cpartially rural\u201d while St. Clair, Monroe, Jackson and Ottawa counties would not.<\/p>\n Looking forward<\/p>\n For Kelley, the change the hospital\u2019s closure forces is out of her hands.<\/p>\n \u201cI was pretty comfortable, so to start over is a little rough,\u201d the nurse said.<\/p>\n The hospital is behind on paying out certain paid time off and retirement benefits, Kelley said, and she\u2019s \u201cdoubtful\u201d she\u2019ll get back her vacation and sick time. <\/p>\n Representatives for the Michigan Nurses Association say union members lost health insurance coverage on the day of closure, with some employees reporting issues getting temporary COBRA coverage. <\/p>\n A call to the hospital by Bridge was not answered in time for publication of this story.<\/p>\n Kelley, who lives in Centreville, about 17 miles away from Sturgis, has found new work at Three Rivers Health Hospital as an as-needed nurse working part-time. <\/p>\n It\u2019s an adjustment from her guaranteed, full-time pay position at Sturgis Hospital. \u201cI\u2019m hoping for 40 hours a week, but that\u2019s probably not realistic.\u201d<\/p>\n While the commute will be slightly closer for Kelley, she said the closure of the Sturgis Hospital will mean longer drives for some patients to reach a health care facility.<\/p>\n \u201cFor some of those people, it could be a matter of life and death.\u201d<\/p>\n ___<\/p>\n
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