Sturgis Hospital To Close Completely On June 19th

Josh Sanchez of WOOD-TV filed a report on the Sturgis Hospital closure, now that it has been completed:

https://www.woodtv.com/news/st-joseph-county/sturgis-hospital-closure-brings-challenges-to-ems-crews-staff/

Sturgis Hospital closure brings challenges to EMS crews, staff
By Josh Sanchez - June 19, 2026

STURGIS, Mich. (WOOD) — The abrupt closure of Sturgis Hospital comes after years of financial trouble — leaving many employees, EMS crews and the community in shock.

Sturgis Hospital closed its doors for the last time Friday after more than 100 years in service. While some of the nursing staff say they are preparing for their own next chapter, they say they are worried for the community left behind.

The announcement sent shockwaves through St. Joseph County, including among other healthcare workers who will now be expected to fill the gaps caused by the closure. Lifecare EMS covers the outer area of the city with about 15% of their calls being transported to Sturgis Hospital.

“Obviously, it’s a shock to us because we have to change where we are transporting some of our patients,” Vice President for Operations Brian Walls told News 8.

Walls says crews are preparing to make adjustments to transportation routes. He says staff follow a state of Michigan protocol of “Transport Destination and Diversion.” That means, when a patient is stable and conscious, it is up to them on which hospital they would like to go to. For other cases, patients are taken to the closest hospital that can provide care for that person’s specific condition.

“The majority of our calls, because we surround the areas, will go to Three Rivers. So that will most likely continue, but, obviously, those surrounding hospitals will have to prepare for increased volume because Sturgis isn’t open any longer,” he said.

The closure comes after years of financial struggles that forced the hospital to shutter its hospice services and birthing center in 2018. In a statement, the hospital pointed to “ongoing financial challenges facing rural healthcare providers, including declining reimbursement rates, rising operational costs, and a sustained decrease in patient utilization.”

Play VideoHospital closing after more than 100 years
Sturgis Department of Public Safety Chief Ryan Banaszak says his team crew was preparing for potential changes due to the hospital’s financial struggles, but the closure still came as a shock.

“(It’s) an hour and a half total turnaround time if we have to go to Coldwater or Three Rivers. So its definitely going to be taxing on our crews. We are going to make some operation changes for that,” he said.

Despite the changes, Banaszak says help will be ready when the call comes. His department is already working on staffing up their ambulance teams.

“The ambulance service they have come to expect from us over the last four years is the same service they will get to this day,” he told News 8.

“I honestly thought that I’d wake up and this was a bad dream. I even told my husband that maybe I’ll wake up in the morning and this won’t be true,” Tina Johnston, a registered nurse with 38 years of experience, said.

The last shift was especially bittersweet for longtime Sturgis Hospital nurse Rebecca Miller.

Miller has spent nearly 40 years at the hospital, and her family legacy stretches back decades earlier to her late aunt, Faye Kerschner, a former Sturgis nurse and the namesake of the Faye Kerschner Award.

“To help take care of somebody and help them feel better and help them may be in a stressful situation where they feel more relaxed, that is so fulfilling and so rewarding,” Miller said.

Miller’s husband, Steve Miller, convinced the hospital to bring back the now-defunct award one last time to honor his wife.

Even amidst the excitement of the award, Rebecca Miller is still grieving the loss of the hospital that’s employed generations of her family and friends.

“I’m more sad for the community than I am for our jobs. I feel like its very important to have a hospital in our community. For that, I am heartbroken,” she said. “There’s a lot of sadness and grief but there is a lot of hope and optimism.”

The loss is hard for the whole family, her husband noted, not to mention the community that’s lost a vital resource.

“Remorse, sadness, but also gratitude because my wife loved working here,” Steve Miller said.

Former Sturgis patients who want to obtain copies of their medical records can do so by calling 269.651.7824 or visiting sturgishospital.com.

It's a crying shame.

Eli Newman of Bridge Magazine suggests, in a retrospective, the Sturgis Hospital closure will be the first of many:

https://bridgemi.com/michigan-health-watch/sturgis-closure-may-be-first-of-more-for-michigan-rural-hospitals/

Sturgis closure may be ‘first of more’ for Michigan rural hospitals
By Eli Newman - July 8, 2026

• Sturgis Hospital closed June 19 after more than a century, citing ongoing financial challenges
• It was Michigan’s first federally designated rural emergency hospital, allowing for additional support to stem losses that come with operating in the area
• Experts warn more rural Michigan hospitals could close amid Medicaid changes and rising costs

Beth Kelley spent most of her life working at Sturgis Hospital. For 32 years, the nurse said it was “unusual to walk down the hall and not recognize somebody.” The independently owned hospital had served its community in rural St. Joseph County for more than a century.

“I like the small hospital atmosphere,” Kelley, 56, told Bridge Michigan. “I know this is maybe a little cliché, but it’s like family.”

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 “shock” and “devastation.” The decision left many long-serving employees like herself “scrambled trying to find a job” while they worked their remaining shift hours.

Sturgis Hospital shuttered its doors June 19, citing “years of ongoing financial challenges” 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 winding down services in recent years, even as it obtained a city-issued pandemic relief loan, a state lifeline and new federal status — Sturgis Hospital became Michigan’s first designated rural emergency hospital in 2023, which allows for increased support from the US Centers for Medicare & Medicaid Services.

It’s not the only rural hospital in Michigan to be impacted by a shifting health care landscape. These health care facilities, sometimes the only medical care providers available for miles, have been navigating several problems, including declining payer reimbursements, rising operating costs, and a federal reworking of Medicaid and Medicare — 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.

“As a nurse, we took care of patients, and that’s all we did. It’s all we cared about. We didn’t care about the financial end of it,” Kelley said. “Those days are gone.”

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’s population is aging, which puts strain on the state’s health care system. In addition, many point to problematic payment models that don’t offset costs for service, and federal program reductions outlined in HR 1 — the “One Big Beautiful Bill.”

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 four of 63 rural hospitals in Michigan could be at risk for closure, 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 labor and delivery unit at Aspirus Ironwood Hospital and the obstetrics unit at MyMichigan Medical Center in Tawas City 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.

“Half of births in rural communities are being paid for by Medicaid at the moment,” Shepherd told Bridge following passage of President Donald Trump’s One Big Beautiful Bill, which calls for slashing Medicaid. “So what you’re talking about is a not very profitable service line — it’s very expensive and one that’s about to face massive financial shortfalls.”

Sturgis Hospital had closed its birthing center in 2018. Last month, it ended the remaining services nearby residents relied on — 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 “substantial operational effect” on the city’s emergency medical services, according to Sturgis Director of Public Safety Ryan Banaszak. When ambulances leave their service areas, he said longer distances and travel times affect their ability to respond.

“What 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,” Banaszak said in an email.

It’s more than distance for some patients — 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.

“If you are a Michigan Medicaid patient, you can’t simply go across the border to another hospital,” 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 “a huge burden on the folks that are impacted the most.”

Rebecca Burns, health officer of the Branch-Hillsdale-St. Joseph Community Health Agency, said she is “saddened by the loss” of the hospital. The public health agency continues to operate a site in Sturgis.

“We stand ready to continue to provide public health preventative services to residents as they need them,” 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.

“People aren’t doing the primary care and they’re not doing the preventative care in between,” 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.

“When they’re not able to pay that bill and there’s not insurance for them to pay, that’s 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.”

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 “the first of more closings that we’re going to see over the next few years” 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 acquired by a health care company in 2023, but city officials reported last August the deal was slow to close “by all indications.” A representative from the company declined to comment.

“Despite extensive efforts by hospital leadership and the Board of Directors to secure the hospital’s future, including pursuing potential acquisition opportunities and partnerships, a sustainable path forward could not be achieved,” 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 340B drug cost program and “swing beds,” 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.

“Rural 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,” LaPine-Ray said in an email.

Michigan has received a $173 million grant from the Rural Health Transformation Program, but the federal initiative has been scrutinized by hospital leaders operating in the targeted areas.

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 “partially rural” while St. Clair, Monroe, Jackson and Ottawa counties would not.

Looking forward

For Kelley, the change the hospital’s closure forces is out of her hands.

“I was pretty comfortable, so to start over is a little rough,” the nurse said.

The hospital is behind on paying out certain paid time off and retirement benefits, Kelley said, and she’s “doubtful” she’ll 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’s an adjustment from her guaranteed, full-time pay position at Sturgis Hospital. “I’m hoping for 40 hours a week, but that’s probably not realistic.”

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.

“For some of those people, it could be a matter of life and death.”

The Michigan Nurses Association (MNA) filed a Worker Adjustment and Retraining Notifications Act (WARN) notification lawsuit against Sturgis Hospital.  It will not bring back the hospital from the dead, but could give the nurses a financial claim against the dead hospital's carcass.

Employers are not required to provide a WARN Act notice if the layoffs are due to business conditions that were not reasonably foreseeable at the time notice would have been required.  Neither is a WARN Act notice required if a company is actively seeking new capital to remain in business, but fails to obtain such capital, resulting in closure:

https://www.woodtv.com/news/st-joseph-county/nurses-union-sues-sturgis-hospital-after-layoffs/

Nurses union sues Sturgis Hospital after layoffs
By Katherine Connolly, Anna Skog - July 14, 2026

STURGIS, Mich. (WOOD) — A union representing nurses at the now-closed Sturgis Hospital is suing over what it’s calling a violation of state employment law.

The Michigan Nurses Association filed a lawsuit against the hospital on July 10, nearly a month after the hospital closed its doors following years of financial challenges and declining services.

While in operation, Sturgis Hospital employed more than 100 full-time employees, including the 17 nurses who are members of the union.

The union said its members were notified of the hospital’s closure on June 16, only three days before it shut its doors for good. Under the Worker Adjustment and Retraining Notifications Act, businesses are required to file a letter with the state if it is closing a facility that meets any of the following: where at least 50 employees will lose their jobs within a 30-day period; a mass layoff will result in the loss of 500 or more employees or at least one-third of the employer’s workforce; or if a facility closure or mass layoff reaching the employment loss threshold will happen within a 90-day period.

In its lawsuit, the union claims the hospital qualified as a facility and an employer under WARN and therefore should have notified employees at least 90 days before its closure. It is asking for back pay and back benefits it argues the nurses should have received during that 90-day period as well as court costs incurred during the lawsuit.

The lawsuit says on June 19, most employees were laid off, except a small group needed to wrap up the hospital’s operations. All registered nurses represented by the union were laid off, which represented 50 or more employees, according to the lawsuit.

The hospital did not qualify for an exemption from the 60-day WARN notice requirement rule, the lawsuit claims, so it should have notified nurses more than three days before the layoffs.

A nurse who spoke with News 8 on the afternoon of the hospital’s closure called it “a bad dream.”

“I honestly thought that I’d wake up and this was a bad dream. I even told my husband that maybe I’ll wake up in the morning and this won’t be true,” Tina Johnston, a registered nurse with 38 years of experience, said.

The closure comes after years of financial struggles that forced the hospital to shutter its hospice services and birthing center in 2018. In a statement, the hospital pointed to “ongoing financial challenges facing rural healthcare providers, including declining reimbursement rates, rising operational costs, and a sustained decrease in patient utilization.”

KFF uses the Sturgis Hospital closure as an anecdote in a Medscape article on rural hospital survival:

https://www.medscape.com/s/viewarticle/earlier-lifeline-rural-hospitals-faces-test-under-big-2026a1000qhw?form=fpf

Earlier Lifeline for Rural Hospitals Faces Test Under ‘Big Beautiful’ Law
By Sarah Jane Tribble and Tony Leys - August 04, 2026

A century-old hospital near Michigan’s southern border was one of the nation’s first to convert into a new emergency-focused model Congress created to save rural care.

Afterward, though, use of Sturgis Hospital’s emergency department fell, according to data collected at the state level. In June, 3 years after taking the federal lifeline, the hospital closed, leaving residents of Sturgis, a town of about 11,000 people, without critical healthcare. Its leaders had tried “every reasonable option” to remain open, including seeking a buyer, according to a hospital news release.

The closure “could be kind of a canary in the coal mine” for rural healthcare, said Lauren LaPine-Ray, the vice president of policy and rural health at the Michigan Health & Hospital Association.

Federal leaders have spent decades trying to prop up rural hospitals, which face persistent staffing shortages, low federal payment rates, and declining patient numbers.

About 1700 hospitals nationwide are eligible to convert to the stripped-down Rural Emergency Hospital model. So far, more than 50 rural hospitals in over 20 states have signed on, but LaPine-Ray and other hospital leaders nationwide fear Sturgis’ failure is a sign the new model won’t be enough to keep doors open when the anticipated federal funding losses arrive from President Donald Trump’s signature One Big Beautiful Bill Act.

Last year, the survival of rural hospitals became a central negotiating point as Congress debated the massive tax and spending law, which is expected to reduce Medicaid funding by more than $900 billion over 10 years. The reductions are expected to have a substantial impact in rural areas that often have high Medicaid enrollment. Republicans added the new $50 billion Rural Health Transformation Program to win votes from a few holdouts in their ranks.

Sturgis’ facility is the only rural US hospital to completely close in 2026. The day before it shuttered, four senators — including Maine Republican Susan Collins, an architect of the rural health fund — sent a letter to Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services. The letter said the way his agency structured the fund “may unintentionally disadvantage many of the rural hospitals and clinics the program was intended to support.”

Congress created the emergency hospital model, which took effect in 2023, as “a whole new way of providing care,” said George Pink, a senior research fellow at the Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill. The Sheps Center tracks rural hospital closures and conversions, and Pink recently released early research showing converted hospitals reporting improved finances, though some are not yet in the black.

Hospitals that convert to the emergency model get a 5% boost in Medicare payments plus an extra monthly facility payment, totaling about $3.6 million a year, according to the Rural Health Redesign Center. In return, the hospitals must offer emergency services and give up their inpatient beds. They can continue offering outpatient services.

Janice Walters, CEO of the Rural Health Redesign Center, which has received federal funding to help hospitals change to the new model, said dozens of hospitals had reached out about converting during the first 5 months of 2026. It’s reasonable, she said, to presume that 10 or 11 might convert this year.

‘No Easy Answers’

More than 40% of all rural hospitals lose money, and hundreds have eliminated obstetrics, general surgery, and chemotherapy services, according to the healthcare consulting group Chartis.

Sen. Chuck Grassley (R-Iowa) sponsored the legislation that created the emergency hospital model. He touted the program last fall, pointing to hospitals such as Landmann-Jungman Memorial Hospital Avera in South Dakota, which he said would be able to use the model to enhance local health services.

Melissa Gale, the chief executive of the Scotland, South Dakota, hospital, said the facility averaged less than one inpatient a day and was “a little above or below break-even year-over-year for decades.”

Today, with additional federal funding from the emergency model, Gale said, the hospital could try to draw in more patients for mammograms and may add a wound care program. In the past year, the hospital has improved employee benefits and reinvested in the building, upgrading plumbing and the heating and air conditioning, she said.

“No one wants to see rural health fail,” Gale said, adding, “There’s no easy answers.”

Federal lawmakers have tried, and thus far failed, to update the emergency hospital model. One proposal, which is expected to be reintroduced, would allow converted hospitals to offer new services, such as beds for patients who need short-term recovery and in-house obstetric labor and delivery units. Another, which is in committee, would allow hospitals to use a federal drug discount program that many facilities use to generate revenue.

The current law is a “critical start, but it must evolve,” said Carrie Cochran-McClain, the chief policy officer for the National Rural Health Association, whose members include hospitals and clinics.

Residents of the southeastern Iowa town of Keokuk continue to hope their shuttered hospital will reopen under the program. The effort has been plagued by delays.

The Keokuk hospital went out of business in 2022 and was later purchased by a Michigan company that pledged to reopen it.

“It’s been a slower process than we envisioned,” said Insight Health Systems Vice President Dayne Walling. Many of the delays have been related to improvements needed to the aging building, he said. Without the emergency hospital model, Walling said, his company would not see a realistic path to reviving the hospital.

Walling said the emergency model would be even better if Congress approved the bill that would allow hospitals to make extra income from prescription medications.

Dierdra Sorrell, the CEO of Clifton-Fine Hospital in Star Lake, New York, said converting to an emergency hospital was not a “silver-bullet magic pill.” But it “put us in a much better place.”

The 20-bed hospital lost more than $2.5 million annually before 2024, when it became New York’s first emergency hospital, Sorrell said. While converting, the hospital shut down inpatient beds and cut 20 employees.

The first year, Clifton-Fine lost only $600,000, and its emergency patient visits were “rock solid,” Sorrell said. The hospital also won state grant money to update its two-bed emergency room and pay for additions that could house visiting specialty doctors or new lines of services, such as a dental hygienist.

If Clifton-Fine had not converted, Sorrell said, anticipated Medicaid losses could have “put us under.”

‘One Important Tool’

Timothy Foster, a spokesperson for the Centers for Medicare & Medicaid Services, said the emergency model is “one important tool” for rural hospitals, “but each facility must determine whether this care model is appropriate.” Foster also said that the new 5-year, $50 billion rural health fund was created to support “innovative, system-wide reforms” that strengthen the rural healthcare delivery system.

Of the 56 hospitals that have converted to the rural emergency model, two have closed, and three remain open but have changed what services they offer, according to Sheps.

In Holly Springs, Mississippi, Alliance HealthCare System was one of the first to convert to the emergency hospital designation, laying off staff and shutting down inpatient beds.

Then, federal officials said they made a mistake and required the hospital to recertify as a new hospital, a delay that cost an estimated $1.5 million in federal reimbursement, CEO Kenneth Williams said.

The hospital is “a shell of what it once was,” Williams said. The ER remains closed.

“We have survived, but survival has come at a tremendous cost,” he said.

Williams said he is closely watching the impact of upcoming Medicaid changes because cuts in insurance coverage or payments “ultimately affect patient access,” he said.

Sen. Josh Hawley (R-Mo.), who voted for the One Big Beautiful Bill Act — which included both the rural health fund and the Medicaid spending reductions — has asked for more support for rural hospitals. Ten full-service rural hospitals in Missouri have closed in the past 12 years, according to the Sheps Center.

Last year, Hawley introduced legislation to repeal the future Medicaid spending cuts. This June, he held a news conference to announce that he wanted to pay rural hospitals $1 million annually, or more if needed, to keep emergency rooms operating. A spokesperson said the bill would apply to all rural hospitals, including those using the emergency model.

Michigan’s Sturgis Hospital faced “some significant challenges” in 2023 when it converted to the emergency hospital model, said LaPine-Ray, of the state hospital association. In the news release, hospital officials said the closure was due to declining reimbursement rates, rising costs, and declining patient numbers. Bobby Morin, a former chief operating and financial officer at the hospital, declined to comment.

The hospital’s ER patient volume dropped 13% in the 2 years after it converted, LaPine-Ray said. Five rural hospitals have closed in the past 20 years in Michigan, and LaPine-Ray said she doubts the rural health fund Congress approved last year will stop the closures. The association, which worked with the governor’s office on the funding, expects less than 10% of Michigan’s $173 million in first-year rural health funding to trickle down to rural hospitals.

That money will pay for “very specific programs where rural hospitals have to create basically a new program and implement it with no funding on the front end,” LaPine-Ray said.

At the same time, she said, the association expects Michigan hospitals to lose $6 billion in Medicaid payments over the next decade because of the One Big Beautiful Bill Act.

“What’s it going to look like in the coming years?” LaPine-Ray said.