When a hospital closes, the intuitive assumption is that everything gets worse — longer drives, delayed treatment, higher medical costs, extended disability. New research from the Workers’ Compensation Research Institute suggests the reality is more nuanced than that, and the findings carry important implications for employers, carriers, and injured workers in communities losing access to hospital-based care.
Bogdan Savych, Senior Policy Analyst at WCRI, presented the institute’s forthcoming study on the impact of hospital closures on the workers’ compensation system at the 2026 WCRI Issues and Research Conference last week. The study, co-authored with Olesya Fomenko, examined multiple dimensions of the closure question — travel distances, service utilization patterns, care settings, medical costs, and disability duration — across both urban and rural areas nationwide.
The headline finding was a split verdict. Hospital closures unquestionably increase the burden on injured workers in rural areas, who must travel significantly farther to receive care. But that added distance does not appear to translate, on average, into higher medical costs or longer periods of temporary disability — a result that surprised even the researcher presenting it.
Savych opened by grounding the research in a concrete scenario: a worker in a rural community suffers a fracture. The nearest hospital has closed. Instead of driving 10 miles to an emergency room, the worker now drives 15. The surgeon isn’t at that facility either, so the worker travels another 30 miles for surgery, then returns home for recovery and drives 15 miles for physical therapy. Multiply that story across the country, and the scope of the problem becomes clear. Nearly every state has communities affected by hospital closures, and roughly half of all closures occur in rural areas.
The study’s methodology compared workers whose nearest hospital closed against a control group whose three closest hospitals all remained open, controlling for worker characteristics, injury types, and location factors to isolate the effect of the closure itself.
In urban areas, closures had minimal impact on travel distances. When you live in a city like Boston, Savych noted, losing one hospital still leaves several others within a short drive. But in rural areas, the effect was substantial — an average increase of about five miles to the nearest emergency room. That may sound modest, but it compounds on top of already longer rural baselines. Workers needing specialty care such as surgery, neurological testing, or pain management injections were already traveling more than 30 miles on average, and for the 10 percent with the longest trips, more than 60 miles. Hospital closures add to distances that are already significant.
Regional variation matters too. In the Northeast and Midwest, the baseline distance to emergency services runs about eight miles. In the West, it’s nearly 15. Closures add four to six miles across all regions, but the practical impact hits hardest where distances are already longest.
The more interesting story, and the one most relevant to workers’ comp stakeholders, is what happens to the pattern of care after a closure. Savych presented evidence that rural workers don’t simply go without treatment. Instead, care shifts out of hospital settings and into alternatives — physician offices, urgent care centers, ambulatory surgical centers, and outpatient facilities.
Before any closures, roughly one in three rural workers received emergency room services on the day of injury, compared to one in five in urban areas. That baseline gap exists partly because rural areas have fewer specialists and emergency rooms often serve as the provider of last resort. After a closure, emergency room utilization in rural areas dropped from about 30 percent to 27 percent. In areas where the hospital closed entirely — with no services retained at the location — the rate fell further, to about 24 percent. And where the nearest remaining hospital was more than 20 additional miles away, only 17 percent of workers received hospital-based emergency care on the day of injury.
But that care didn’t simply vanish. The study found increases in evaluation and management office visits, physical medicine services, and even major surgeries performed outside hospital settings. Workers who would have gone to a hospital emergency department were instead showing up at physician offices and outpatient facilities. Physical therapy, previously delivered in hospital-based settings, shifted to community-based providers, and workers actually received slightly more PT visits in those non-hospital settings.
This is where the findings defied expectations. Savych acknowledged that he had personally expected to find cost increases — and polled the audience, most of whom raised their hands predicting the same. But the data told a different story.
Across the full range of measures — total medical costs, indemnity benefits, and duration of temporary disability — the study found no statistically significant effects from hospital closures. The changes were small and inconsistent, offering no strong evidence that closures drive up costs or extend time away from work.
The likely explanation is what Savych described as a “setting effect.” When care migrates out of hospitals and into outpatient and office-based settings, the per-service cost tends to be lower. Hospital-based care carries higher facility fees, and when workers receive equivalent services in less expensive settings, the cost differential can offset the friction created by longer travel distances and the slightly increased utilization of services like physical therapy. The net result, at least on average, is roughly a wash.
Similarly, return-to-work timelines showed no meaningful change. Savych said this finding surprised him, but attributed it to the fact that workers were still accessing the care they needed — just in different places and sometimes with longer drives to get there. The care itself wasn’t being foregone; it was being rerouted.
For injured workers, the clearest takeaway is that hospital closures make accessing care harder and less convenient, particularly in rural communities where distances are already long. The burden falls on the worker to find alternatives, navigate unfamiliar facilities, and absorb the time and cost of additional travel. But the evidence suggests that workers are, by and large, still getting treated.
For employers in rural areas, the findings reinforce what many already know: finding providers for injured workers is a challenge that hospital closures only intensify. Savych shared an anecdote about his wife’s first job out of college, which involved personally driving an injured worker 40 miles to physical therapy appointments because that was the only available provider. Employers are already problem-solving around access gaps, and closures will push more of them toward solutions like telemedicine, partnerships with urgent care clinics, or outreach to ambulatory surgical centers.
For the workers’ compensation system more broadly, the cost neutrality finding is notable but comes with caveats. These are average effects. Individual cases in areas with severe access constraints — where the nearest hospital is now 20 or more additional miles away — may look very different. And the study examined closures that have already occurred; the pipeline of potential future closures, particularly if Medicaid coverage contracts as Dr. Benjamin Sommers warned in his keynote address earlier in the day, could produce closures in communities with even fewer fallback options.
During the Q&A, audience members raised questions about regional variation, telehealth adoption, and whether new providers are entering markets left vacant by closures. Savych noted that regional differences in the core findings were modest — workers in the West are accustomed to longer drives, and an extra four to six miles doesn’t change behavior as much as one might expect. On telehealth, he acknowledged the study hadn’t examined it directly but flagged it as a priority for future research. And on new market entrants, he pointed to a broader trend of nurse practitioners and physician assistants filling gaps previously staffed by physicians, though he cautioned that whether a given rural area can financially sustain a new provider depends heavily on the insurance coverage of its population — a factor now under considerable pressure.
The research arrives at a moment when the conversation about rural healthcare access is intensifying. With Medicaid work requirements set to take effect later this year and enhanced marketplace subsidies already expired, the financial foundation supporting rural hospitals and the communities they serve is shifting. WCRI’s findings suggest the workers’ comp system has, so far, absorbed hospital closures without dramatic cost consequences — but the next wave of closures, driven by coverage losses rather than the market dynamics of the past decade, may test that resilience in ways the data hasn’t yet captured.
