Beth Kelley spent most of her life working at Sturgis Hospital. For 32 years, the nurse said it was 鈥渦nusual to walk down the hall and not recognize somebody.鈥� The independently owned hospital had served its community in rural St. Joseph County for more than a century.
鈥淚 like the small hospital atmosphere,鈥� Kelley, 56, told Bridge Michigan. 鈥淚 know this is maybe a little clich茅, but it鈥檚 like family.鈥�
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 鈥渟hock鈥� and 鈥渄evastation.鈥� The decision left many long-serving employees like herself 鈥渟crambled trying to find a job鈥� while they worked their remaining shift hours.
Sturgis Hospital shuttered its doors June 19, citing 鈥測ears of ongoing financial challenges鈥� facing rural health care providers. The facility had 84 licensed beds and about 300 associates working, according to the hospital.
There were warning signs. The facility had been in recent years, even as it obtained a , a and new federal status 鈥� Sturgis Hospital became Michigan鈥檚 first in 2023, which allows for increased support from the US Centers for Medicare & Medicaid Services.
It鈥檚 not the only rural hospital in Michigan to be impacted by a . These health care facilities, sometimes the only medical care providers available for miles, have been navigating several problems, including , , and a federal 鈥� programs used by the bulk of patients in rural hospital settings.
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.
鈥淎s a nurse, we took care of patients, and that鈥檚 all we did. It鈥檚 all we cared about. We didn鈥檛 care about the financial end of it,鈥� Kelley said. 鈥淭hose days are gone.鈥�
Service cuts
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.
For one thing, Michigan鈥檚 population is aging, which puts . In addition, many point to problematic payment models that don鈥檛 offset costs for service, and federal program reductions outlined in HR 1 鈥� the 鈥淥ne Big Beautiful Bill.鈥�
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.
As Congress debated the One Big Beautiful Bill last year, the Sheps Center estimated , 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.
Even if a hospital does manage to remain open, many have to drop major parts of their operation to survive. Last year, the and the closed.
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.
鈥淗alf of births in rural communities are being paid for by Medicaid at the moment,鈥� Shepherd told Bridge following passage of President Donald Trump鈥檚 One Big Beautiful Bill, which calls for slashing Medicaid. 鈥淪o what you鈥檙e talking about is a not very profitable service line 鈥� it鈥檚 very expensive and one that鈥檚 about to face massive financial shortfalls.鈥�
Sturgis Hospital had closed its birthing center in 2018. Last month, it ended the remaining services nearby residents relied on 鈥� surgery, laboratory, medical imaging, physical therapy, endoscopy and cardiac rehabilitation services.
From 2 miles to 25
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.
That reality has a 鈥渟ubstantial operational effect鈥� on the city鈥檚 emergency medical services, according to Sturgis Director of Public Safety Ryan Banaszak. When ambulances leave their service areas, he said .
鈥淲hat 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,鈥� Banaszak said in an email.
It鈥檚 more than distance for some patients 鈥� 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.
鈥淚f you are a Michigan Medicaid patient, you can鈥檛 simply go across the border to another hospital,鈥� 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 鈥渁 huge burden on the folks that are impacted the most.鈥�
Rebecca Burns, health officer of the Branch-Hillsdale-St. Joseph Community Health Agency, said she is 鈥渟addened by the loss鈥� of the hospital. The public health agency continues to operate a site in Sturgis.
鈥淲e stand ready to continue to provide public health preventative services to residents as they need them,鈥� Burns said.
Another perspective
Dr. Andrea Wendling sees a pattern play across rural systems which lands patients in emergency rooms and causes hospitals to operate on tight margins.
鈥淧eople aren鈥檛 doing the primary care and they鈥檙e not doing the preventative care in between,鈥� 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.
鈥淲hen they鈥檙e not able to pay that bill and there鈥檚 not insurance for them to pay, that鈥檚 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.鈥�
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 鈥渢he first of more closings that we鈥檙e going to see over the next few years鈥� in the state.
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.
But acquisition is no guarantee of survival. Sturgis Hospital had been in 2023, but the deal was slow to close 鈥渂y all indications.鈥� A representative from the company declined to comment.
鈥淒espite extensive efforts by hospital leadership and the Board of Directors to secure the hospital鈥檚 future, including pursuing potential acquisition opportunities and partnerships, a sustainable path forward could not be achieved,鈥� Sturgis Hospital noted in its announcement.
The closure underscores the need for rural hospitals to use every tool for financial sustainability, including dollars from the and 鈥� ,鈥� 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.
鈥淩ural 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,鈥� LaPine-Ray said in an email.
Michigan has received a $173 million grant from the , but the federal initiative has been .
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 鈥減artially rural鈥� while St. Clair, Monroe, Jackson and Ottawa counties would not.
Looking forward
For Kelley, the change the hospital鈥檚 closure forces is out of her hands.
鈥淚 was pretty comfortable, so to start over is a little rough,鈥� the nurse said.
The hospital is behind on paying out certain paid time off and retirement benefits, Kelley said, and she鈥檚 鈥渄oubtful鈥� she鈥檒l get back her vacation and sick time.
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.
A call to the hospital by Bridge was not answered in time for publication of this story.
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.
It鈥檚 an adjustment from her guaranteed, full-time pay position at Sturgis Hospital. 鈥淚鈥檓 hoping for 40 hours a week, but that鈥檚 probably not realistic.鈥�
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.
鈥淔or some of those people, it could be a matter of life and death.鈥�
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