Kim McGuire had already spent nearly two weeks at St. Anthony Hospital in Oklahoma City when a hospital case manager delivered the news: her insurance would not cover a transfer to a rehabilitation facility.
She still needed wound care. She still needed physical therapy. But there was nowhere for her to go.
Then, someone mentioned a small hospital in Stroud.
“I mean, it really sounded too good to be true,” her husband, Mike McGuire, said.
By Tuesday, Kim McGuire had been transferred.
Fifty days into her hospitalization, the couple says they found something they didn’t expect in a rural hospital: time, attention and a level of care they say goes beyond what they had experienced elsewhere.
“It’s phenomenal, the way we’ve been treated here,” Mike McGuire said.
Cases like McGuire’s highlight a growing gap in the healthcare system — one that rural hospitals are increasingly stepping in to fill. Patients who no longer need acute hospital care but aren’t ready to go home often struggle to find placement in traditional rehabilitation facilities.
At some rural hospitals, that gap has become an opportunity and, in some cases, a lifeline.
Reinventing the rural hospital
At the hospital in Stroud, operated by Rural Wellness, Inc., that role is central to the business model.
Administrator Angelia Sylsberry describes a category of patients who fall between levels of care: too sick for home, not appropriate for long-term nursing facilities, and not eligible for higher-level rehabilitation programs.
“They’re in limbo,” she said.
The solution is a program known as “swing bed,” which allows hospitals to use inpatient beds for post-acute care. Patients typically stay longer than traditional hospital admissions, receiving therapy, wound care and medical oversight as they recover.
At Stroud, that model has become dominant. Most patients are in swing bed care, with stays averaging around three weeks.
The hospital draws patients from across the region — Oklahoma City, Tulsa and surrounding communities — effectively serving as a step-down facility for larger hospitals.
It’s a different kind of rural hospital: not just a place for emergency care, but part of a broader system managing patient flow.
But Sylsberry is clear that this didn’t happen overnight.
To support that model, the hospital has added services over time as a deliberate, long-term strategy to increase both the complexity of patients it can treat and the number of people it can serve.
Today, about 90% of the hospital’s 25 beds are used for swing-bed patients, reflecting a fundamental shift in how the facility operates.
The approach has also become central to its financial survival.
“When you only have two or three patients in the hospital, your overhead is still high — you’re losing money,” Sylsberry said. “As your census grows and those service lines grow, then you start gaining.”
Without those services, she said, the hospital would likely revert to what it was a decade ago when it was a small facility with limited patients, reduced staff and fewer resources.
More broadly, she sees the model as part of a necessary shift for rural healthcare.
“If a community loses their hospital, there goes their community,” Sylsberry said. “Industry won’t come in without a hospital. You just see that decline.”
Looking ahead, she said rural hospitals will need to continue expanding services — whether through swing-bed programs, outpatient care or visiting specialists — to remain viable in a system where funding pressures and staffing shortages are likely to intensify.
“It’s a strategic long-term plan,” she said, requiring investment in staff, equipment and training before the hospital could take on more complex cases.
Not one model, but many
While the hospital in Stroud has leaned heavily into post-acute care, other rural hospitals are adapting in different ways.
Just 10 miles south of the Oklahoma border, Ochiltree General Hospital in Perryton, Texas, has expanded its swing-bed program and added services such as rehabilitation and visiting specialists, drawing patients from across a broader region, including Oklahoma.
Community outreach director Amie Marrufo said those additions do more than expand care — they change how residents think about the hospital.
“If they’re going to drive past your hospital, that’s not helpful,” she said. “If they think you don’t do something, they won’t come back.”
The hospital also brings in specialists from larger cities on a rotating basis, allowing patients to receive surgery and follow-up care locally instead of traveling.
In Sulphur, a different approach has taken hold.
There, the hospital has focused on core services — emergency care, primary care and basic diagnostics — supported by its designation as a critical access hospital, which provides cost-based reimbursement through Medicare.
Jared Chanski, chief executive officer of Preferred Management Corp., which provides administrative and management support to the Arbuckle Memorial Hospital in Sulphur and several rural hospitals in Texas, said the biggest challenge for rural facilities is simple: volume.
“Rural areas just don’t have the volume to generate income the way urban systems do,” he said.
Instead, survival depends on controlling costs, focusing on essential services and, increasingly, working with outside partners to handle administrative and financial functions.
For some systems, the solution is scale.
Ozarks Community Hospital in Arkansas operates a network of clinics across rural Missouri and Arkansas, feeding patients into its hospital for specialized care while also receiving transfers from larger hospitals for swing bed rehabilitation. Until recently it also operated a clinic in Jay, Oklahoma.
But even with that network, administrator Scott Taylor said the math remains difficult.
The system recorded its highest revenue year recently, he said, but still operated at a loss.
The financial squeeze
Even as some rural hospitals are finding ways to adapt, the financial pressures driving those changes are intensifying.
Hospitals across Oklahoma are bracing for significant reductions in Medicaid funding, a program that plays an outsized role in rural health care. Oklahoma hospitals are projected to lose about $6.7 billion in Medicaid reimbursements over the next decade due to federal policy changes, according to the Oklahoma Hospital Association, with rural hospitals expected to be among the hardest hit.
That matters because rural hospitals rely more heavily on Medicaid and Medicare than their urban counterparts. Many are already operating with negative margins and depend on supplemental payments to stay afloat, said Rich Rasmussen, president of the Oklahoma Hospital Association.
“Today is the high-water mark,” Rasmussen said, warning that the financial strain will deepen as cuts take effect.
At the same time, administrators say the growing use of Medicare Advantage plans has introduced additional challenges, including delays, denials and lower reimbursement rates, further complicating an already fragile funding model.
Rural hospitals face a structural disadvantage: they serve smaller populations but carry many of the same fixed costs as larger facilities. When reimbursements fall, Rasmussen said, those hospitals have fewer options to absorb the losses, often forcing difficult decisions about which services to maintain and which to cut.
Some are already reducing or eliminating high-cost departments such as obstetrics or inpatient care. Others are shifting toward outpatient services, telehealth and regional partnerships as they attempt to adjust.
More than half of Oklahoma’s rural hospitals are considered at risk of closure, according to health care analysts, and nationally, hundreds of rural facilities face similar threats.
Health care leaders say the result is a fundamental shift in how rural hospitals must operate.
“They will have to redefine what their mission is,” Rasmussen said.
Beyond access to care, the consequences extend into the broader economy. Rural hospitals are often among the largest employers in their communities, supporting local jobs and serving as anchors for economic activity. Cuts to Medicaid funding could lead to job losses, reduced economic output and further population decline in already vulnerable areas.
Lawmakers have created a $50 billion rural health fund aimed at supporting new care delivery models, including technology and workforce innovations. But hospital leaders say those efforts are unlikely to offset the scale of the financial pressures.
“It does not stabilize hospitals. Not at all,” Rasmussen said.
Even where adaptation is possible, administrators say it comes with limits.
Rural hospitals must contend not only with reimbursement pressures but also with structural challenges in volume, said Chanski. Many reimbursement models assume patient volumes that simply do not exist in smaller communities.
In that environment, he said, standing still is not an option.
“For those that stagnate, they will struggle,” Chanski said.
At Newman Memorial Hospital in Shattuck, Chief Executive Officer Tom Vasko said those pressures are already reshaping how care is delivered.
“The financial pressures tied to Medicaid and Medicare aren’t incremental,” Vasko said. “They’re structural.”
His hospital has responded by expanding services — adding surgical capabilities, specialty care and a broader clinic network — in an effort to keep care local and sustain operations. But even that approach has limits.
“Grant-based and short-term funding mechanisms are not a substitute for sustainable reimbursement,” Vasko said.
Taken together, hospital leaders say the changes reflect a system under strain and one where adaptation is necessary but not always sufficient.
Rural hospitals as part of larger systems
Some rural hospitals have been absorbed into larger, urban-based health systems, becoming part of networks that aim to keep routine care local while shifting more complex cases to regional hubs.
At Integris Health, that approach is built around treating rural hospitals as community anchors, said Aaron Steffens, the system’s chief strategy officer. The goal is to preserve local access and identity while providing resources that standalone facilities often cannot sustain.
“A rural hospital inside a larger system can offer things a standalone facility simply can’t,” Steffens said, citing shared technology, clinical resources, administrative support and access to specialists.
Under that model, routine and urgent care — including emergency services, primary care, imaging and basic surgery — remains local, while higher-complexity cases such as cardiac procedures, neurosurgery and advanced cancer treatment are referred to larger facilities in Oklahoma City.
“The principle is simple: right care, right place,” Steffens said.
Patient flow between those facilities is coordinated through a centralized transfer system, with an emphasis on continuity of care. After receiving specialized treatment in urban hospitals, patients are often transferred back to their home communities for follow-up care.
“It’s not a hand-off so much as a handshake,” Steffens said, describing the coordination between rural and urban teams.
Post-acute services such as swing beds and rehabilitation also play a key role in that system, allowing patients to recover closer to home while easing pressure on larger hospitals.
Even large systems face the same pressures affecting rural healthcare more broadly. Steffens pointed to tight margins, workforce shortages and the fixed costs of maintaining services such as emergency care in low-volume areas.
Looking ahead, he said rural hospitals may increasingly function as community-based health centers focused on primary care, chronic disease management and prevention, supported by telehealth and centralized resources.
But those networks are also under increasing financial strain. Integris Health officials have said the system expects an annual revenue loss of roughly $130 million tied to reductions in
Medicaid and Medicare funding, prompting clinic closures, service line cuts and workforce reductions across the state. In a statement, the organization said the changes are necessary to remain a “forever” health system — a reflection of the difficult tradeoffs large providers now face in maintaining access while adjusting to shrinking revenue.
Closures and their consequences
Not every rural hospital has been able to adapt before financial pressures forced a shutdown.
In Clinton, the city’s hospital closed at the end of 2022 after its private operator withdrew following years of shrinking services. It later reopened under public control with fewer services and a reduced footprint.
In Pauls Valley, the hospital closed again in early 2025, less than four years after it reopened. The facility struggled with ongoing financial losses, and a decades-old decision not to convert to critical access status limited its reimbursement options.
In Stilwell, where the hospital shut down in 2025, residents remain without nearby emergency care, traveling roughly 30 miles to reach the nearest facilities.
“It’s terrible that we don’t have a hospital,” Mayor Jean Ann Wright said.
Local officials in several communities have explored converting facilities to rural emergency hospital models, which focus on emergency and outpatient services while relying on larger systems for inpatient care.
A system in transition
Taken together, the changes point to a broader shift in rural healthcare.
Hospitals are no longer trying to be all things to all patients. Instead, they are redefining their roles — as rehabilitation centers, outpatient hubs, regional partners or integrated systems of clinics and specialty care.
Some are finding ways to adapt.
Others have already closed.
And even those that are expanding say the underlying financial pressures remain unresolved.
Rural hospitals, administrators say, are not just evolving — they are racing to keep up with a system that is changing around them.
Oklahoma Watch, at oklahomawatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.
