ARCADIA, Fla. — Several hospital groups expressed interest in purchasing DeSoto Memorial Hospital (DMH) as the facility faces financial uncertainty. Seven different groups expressed interest, according to hospital spokesperson Sarah Hipp.
The hospital conducted tours for interested groups, but has not received any formal proposals. The hospital started a soliciting proposals after an outside health care system approached DMH about a sale.
WATCH: U.S. Navy veteran talks about importance of having hospital in Arcadia:
DeSoto Memorial is considering a sale because of concern over future Medicare and Medicaid reimbursements, CEO Vince Sica previously told FOX 4. Those reimbursements makes up a significant majority of the hospital's money. About 50% of DeSoto Memorial's revenue comes from Medicare, according to Hipp. Roughly 15% comes from Medicaid.
That is not uncommon for rural hospitals, according to Professor Timothy McBride, a health policy analyst at Washington University in St. Louis. He is part of the Rural Policy Research Institute (RUPRI) Health Panel that provides advice on rural health issues to Congress.
"Rural hospitals are always on the edge with negative margins," McBride said.
A larger health care system could also help with staffing issues. A significant portion of the hospital's staff is reaching retirement age, Sica said.
"For lack of a better term, and utilizing a sports analogy, we have a very short bench," Sica said.
CHALLENGES FACING RURAL HOSPITALS
Suncoast Searchlight reports an independent financial review finds the hospital posted a $500,000 operating loss in fiscal year 2024. DeSoto Memorial is not the only rural hospital to face challenges. 196 rural hospitals either closed or converted into a smaller medical facility since 2005, according to the University of North Carolina. 153 of those are since 2010.
President Donald Trump signed the 'One Big Beautiful Bill Act' in July that included significant cuts to Medicaid. The nonpartisan Congressional Budget Office (CBO) finds the bill will reduce federal Medicaid spending by an estimated $911 billion over a decade. The CBO is a federal agency that provides economic and budget analysis to Congress.
"Anytime cuts are made to those two programs, it's going to devastate [rural hospitals]," McBride said.
The 'Big Beautiful Bill' includes $50 billion for rural hospitals over the next ten years. Half the money will be distributed equally among all 50 states, according to the National Rural Health Association.
Rural hospitals tend to have a higher percentage of older and low-income patients, McBride said. About 60% of people in the U.S. have employer-sponsored insurance. That drops to 45% in rural areas, McBride said, because there's more small businesses in the service and agriculture sector.
The other half will be distributed to states through the Centers for Medicare and Medicaid Services (CMS). States must apply for the money. However, CMS hasn't determined the application process rules yet.
Another looming challenge for rural hospitals is the expected end of COVID-era subsidies that could see millions drop their insurance plans. The American Rescue Plan Act, signed into law by President Joe Biden in 2021, created enhanced premium tax credits.
Essentially, the bill expanded access to tax credits available to people who get insurance plans through the federal Health Insurance Marketplace. The goal was to make it easier for people to get healthcare during the pandemic, McBride said. Enrollment through the marketplace soared, according to the Kaiser Family Foundation, more than doubling from 11.4 million people in 2020 to 24.3 million people in 2025.
However, the tax credit sunsets at the end of 2025. If Congress doesn't extend the credit, McBride said he's seen estimates that marketplace premiums could jump between 75% and 100%. Premiums were expected to go up anyway, McBride said, because of rising healthcare costs. But the loss of the enhanced credit would only exacerbate costs.
The Congressional Budget Office estimates between four and five million people could drop their marketplace insurance plans if the credit isn't renewed, McBride said. That means more people will show up at rural hospitals uninsured, putting a further burden on facilities like DMH.
McBride said quality of care can improve when a large, urban health care system purchases a rural hospital. Being part of a larger system could help DMH provide specialty services like orthopedic care and gastroenterology, Sica said.
However, these health care systems may funnel rural patients towards larger facilities. Traveling long distances can create a burden on patients, McBride said.
"If a person's got to drive, like, an hour and a half, over bad roads, that's not good," McBride said.
U.S. Navy veteran Tracey Goff said DeSoto Memorial provides convenient medical care. She's lived in Arcadia for 12 years, and has visited the hospital several times. Goff said she suffers from a condition that causes her right-hand to go numb.
"This is where I come because everything else is 45 minutes to an hour away," Goff said. "I've come in here and the longest I've ever waited is 20 minutes."
Goff said DeSoto Memorial provides a small-town feel you can't find in larger health care systems. A former DeSoto County substitute teacher, Goff said she often runs into old students who now work at the hospital.
"Here, you get to know the nurses, know who's in and who's what, and who's where," Goff said. "And it's just very, very comforting."
What's next?
McBride cautioned there can be bad outcomes when private investment firms gobble up hospitals. Private equity acquisitions in health care grew to over 150 billion dollars since 2020, according to the American Medical Association Journal of Ethics.
Investment firms may prioritize profits over patient care, the journal said. A Harvard Medical School study found patients are more likely to be harmed in a hospital acquired by a private equity firm.
"They don't always do the right thing," McBride said. "They're in there to sort of scoop up the money and then they disappear."
DeSoto Memorial did not reveal what groups expressed interest in purchasing the hospital. Hipp said all seven of the groups run other hospitals.
Even if a sale does not go through, the hospital remains adamant that it will stay open. The hospital's CEO said it would find a way to keep operating, no matter what.
"The hospital is always going to be here," Sica told FOX 4.
DMH said Oct. 1 is the deadline for groups to submit a formal purchase proposal.
