More Than Medicine: How Michigan’s rural hospitals anchor their communities

Surrounded by endless stretches of quiet forest, Helen Newberry Joy Hospital in the eastern Upper Peninsula hums with a vital, concentrated energy. 

Located in Luce County — a region larger than the state of Rhode Island yet home to just a few thousand residents — the facility serves as the region’s North Star: a steady pulse of care within a vast expanse of wilderness and Lake Superior shoreline.

Centrally located in Newberry, known as the “Moose Capital of Michigan,” Helen Newberry Joy is the only full-service hospital in the county. It provides the essential lifelines one expects from a rural center: 24-hour emergency care, diagnostic imaging, and surgical services. 

But its role, mirrored by rural hospitals across Michigan, extends far beyond the exam room. These institutions are the heartbeat of their small towns, often serving as the primary economic engine and the largest employer in the region.

“Being a community hospital means we do a lot of community outreach,” says Helen Johnson, who took the helm as CEO at Helen Newberry Joy Hospital some 18 months ago. “You never know what the community is going to need from you. We are asked to do many things beyond healthcare.”

Johnson, a 30-year veteran of the industry, embodies this multi-faceted role. She serves on the Luce County Economic Development board and assists with strategic planning for the local school system. The hospital even partners with schools to provide students with backpacks and healthy snacks. 

In a close-knit town where tourism and forestry drive the economy, the hospital’s leadership is woven into the social fabric.

“We punch above our weight,” Johnson says, noting that she can’t visit the grocery store without running into patients. “I was once even asked to judge a dog show,” she adds with a laugh.

A Critical Line of Defense

Helen Newberry Joy is among 35 Critical Access Hospitals (hospitals with 25 beds or less that meet certain federal requirements) in Michigan. There are 10 Critical Access Hospitals in the U.P. and 25 in the lower peninsula, according to the Michigan Center for Rural Health. These faciitires provide “critical points of access,” emergency and acute care, for the roughly 2 million Michiganders who live in rural areas.

In addition, Michigan is home to one rural emergency hospital — Sturgis Hospital in St. Joseph County, near the Indiana border — and 21 rural Prospective Payment System hospitals (requiring 49 beds or less) that are eligible for federal funding from the Small Hospital Improvement Program.

“Our rural hospitals provide much more than purely physical medical services,” explains Lauren Lapine-Ray, vice president of Policy & Rural Health for the Michigan Health & Hospital Association (MHA). Many operate nursing homes, fitness centers, and physical therapy clinics. They sponsor 5K races and host community bingo.

“To have a thriving community, you need strong schools, a support system, and access to healthcare,” Lapine-Ray says. “These hospitals take the name of the community to heart.”

A Looming Financial Storm

Despite their local importance, the future of these institutions is precarious. A report last summer from the American Hospital Association reveals that nearly 50 percent of rural hospitals operated at a financial loss in 2023. Over the past decade, 92 rural hospitals nationwide have closed or ceased inpatient services.

The struggle is often driven by losses in critical service lines like obstetrics, behavioral health, and pulmonology.

The reality of these closures hit home in the U.P in 2024 when Aspirus Ontonagon Hospital — the only full-service facility in one of the state’s largest counties — closed its emergency doors. While it eventually reopened as a clinic, residents now face a 45-mile drive through unpredictable winters for emergency care.

The industry is now bracing for the impact of the “One Big Beautiful Bill” passed in 2025, which introduced significant changes to Medicaid reimbursements and policies. Because rural hospitals rely on Medicaid and Medicare for a substantial portion of their revenue, experts fear a surge in uncompensated care.

While a $50 billion Rural Health Transformation Fund was established to mitigate these losses, many hospital officials remain skeptical of its long-term efficacy.

“Honestly, I don’t believe this money is coming back to us,” said Newberry’s Johnson, who has been advocating for rural health and rural communities at the national and state levels. “People in rural areas deserve health care as much as their suburban and urban counterparts. We need to figure out where the revenue we need is going to come from. I don’t think the pie is getting any bigger.”

The frustration among rural hospital leaders is palpable.

“We are lean organizations without the benefit of political lobbyists and grant writers to curate messages to tilt the odds in our favor,” Johnson said. “I will be working hard to try to get some of these dollars into either my hospital or my community to help one of the most rural and least wealthiest counties in Michigan.” 

Access to those monies, she added, could help fund “something like upgrading our CT machine or our 30-pus-year-old mechanical infrastructure. We tend to take these things for granted but facilities maintenance is crucial to running a safe hospital.”

Fighting for the “Rural Health Strong”

In response to these pressures, Hillsdale Hospital in southern Michigan launched a national campaign called Rural Health Strong. The initiative advocates for rural healthcare and fights against the federal cuts that threaten the stability of small-town facilities.

Its public campaign includes regular updates on the hospital website about the “pulse” of rural health care, including hospital closures, rising costs and staffing cuts. In addition, a regular podcast, “Rural Health Today,” discusses issues relevant to rural health care with a changing roster of health care experts.

Jeremiah J. Hodshire, president and CEO of Hillsdale Hospital, has been at the forefront of this effort. 

In a community of 8,000, Hodshire is ubiquitous — serving on the Economic Development Partnership, the Board of Public Utilities, and Michigan Works! Southeast, while maintaining a constant presence at local events.

“He knows pretty much everyone and can’t walk a step through the hospital without stopping to chat with someone he knows like family,” says Kyrsten Newlon, Hillsdale’s director of communications.

Hillsdale administrators and staff are equally involved in the community as members of service clubs and volunteers at the county fair. The hospital hosts blood drives and, notably, jumped in to assist with local food drives following the government shutdown last fall, which disrupted food assistance programs.

Driving that commitment, Newlon says, is the fact that Hillsdale is an independent hospital and not part of a large, corporate health system.

“The people who are directing our hospital are the people who live in Hillsdale County,” Newlon says. “They get their groceries here. They see their patients at the local farmers markets. We are a non-profit; every single dollar goes back into the community.”

A Mission of Innovation in the Thumb

This deep engagement is echoed at the McKenzie Health System in Sandusky, which provides emergency care to the residents of this small community of neary 3,000 in Michigan’s Thumb. The hospital is one of the largest employers in a region defined by its agricultural roots and towering wind turbines.

As the only hospital in Sandusky, McKenzie is a constant participant in public health and mental health initiatives.

“Because McKenzie is in the Sanilac County seat, we find ourselves deeply engaged in initiatives that involve the public health system, community mental health, and school systems,” says Steve Barnett, President and CEO of McKenzie Health System.

The hospital largely serves an older, less affluent population with a higher degree of chronic diseases—a demographic trend seen across rural America. Approximately two-thirds of their patients are on Medicare or Medicaid. To combat this, Barnett encourages his team to lead year-round activities that focus on preventative education.

“Our mission and spirit of being innovative drives how we organize healthcare,” Barnett says. “Working with the population to reduce overall costs allows us to work with community members regularly on wellness, rather than just treating them when they are sick.”

The Stakes of Survival

From the shores of Lake Superior to the farmlands of the Thumb, these hospitals are more than just buildings with beds; they are the anchors of Michigan’s rural identity. If these anchors fail, the results could be catastrophic.

Hillsdale’s Hodshire fears the worst, emphasizing that the undermining of rural hospitals will reach far beyond patients. It creates a domino effect on local economies, driving away businesses, jobs, and families.

“Rarely do you read about a hospital closing and then coming back to life,” Hodshire says. “It just doesn’t happen.”

The preservation of these facilities is not just a matter of medical access; it is a matter of community survival. Without a local ER, a town’s population ages and shrinks. Without important medical services, young families are less likely to move in, hospital leaders said.

“The role our rural hospitals play in the community is really important,” the MHA’s Lapine-Ray says. “I see them as the core of health and wellness. We have been very fortunate to have had really strong community hospitals in Michigan. We are paying close attention to what’s ahead.”

With policy shifts and more financial pressures ahead, the survival of these “North Stars” remains the most critical factor in the health — and the heart — of Michigan’s rural communities.