Two Oregon hospitals announce closures in a week

Within a week, two Oregon hospitals have said that they are planning to end inpatient services at their facilities.

Vibra Specialty Hospital in Portland has announced that it will be closing February 1, 2026. The hospital sent notification to Oregon’s state government Monday that it will be shutting down and dismissing the facility’s 310 employees.

“Vibra Specialty Hospital of Portland will be closing the hospital and conducting a permanent reduction in force due to ongoing financial challenges that have made it unsustainable to continue operations,” the hospital said in the letter.

The critical care hospital provides services for patients who require longer stays for recovery. The hospital offers respiratory, cardiac, neurological, infectious disease, and traumatic injury programs. The facility has 73 beds, according to the American Hospital Directory.

Days after the Vibra announcement, Ashland Community Hospital, based in southern Oregon, said it will be closing its inpatient services and obstetric services by next spring. The nonprofit Asante health system, which operates the hospital, made the announcement Wednesday. The hospital had operated 49 inpatient beds.

Asante said the Ashland Community Hospital will continue to operate its emergency department around the clock. The hospital will provide other outpatient services, including surgical and imaging services, the system said. The hospital is transitioning to a satellite campus of Rogue Regional Medical Center.

Oregon landscape ‘is worsening’

Tom Gessel, president and CEO of Asante, said in a news release that mounting financial losses at Ashland Community Hospital drove the changes. The system said the hospital is on pace to lose $7.3 million this year.

“The financial and regulatory landscape for Oregon hospitals is worsening,” Gessel said in the statement.

“This past year, Ashland Community Hospital lost millions of dollars,” he said. “Operating the hospital with inpatient and obstetrics services is no longer viable, and duplicating underutilized services with Rogue Regional just 11 miles away is not the best use of limited health care resources in the valley.”

Gessel pointed to state regulations and impending cuts in support from Medicaid.

“Legislation implemented in Salem has put hospitals in an untenable situation. This will only worsen with the future reductions to Medicaid funding,” Gessel said in the statement.

Staff at Ashland workout outside of the emergency department will be given the chance to hold similar positions at Asante’s other hospitals.

Asante said it has seen increased usage of Ashland’s emergency department, while inpatient volumes have declined.

‘Cascade of closures’

The Hospital Association of Oregon decried the loss of inpatient services at two Oregon hospitals, and the group said that other hospitals have been reducing services due to worsening financial conditions.

“This should be a wake-up call for our state leaders,” the association said in a post on LinkedIn. “Without action to better fund and support hospitals that provide vital health services, we will continue to see a cascade of closures. Oregon leaders must ask themselves what the state is willing to do differently to prevent the health care system from further collapse.”

Nearly half of Oregon’s hospitals (45%) lost money last year, and 26% barely broke even, according to a report released in May by the Hospital Association of Oregon.

Becky Hultberg, president and CEO of the Hospital Association of Oregon, told Chief Healthcare Executive® in a May 2025 interview that Oregon’s hospitals are facing serious financial hardships. And she says hospitals in Oregon have been struggling for years.

“We're very concerned about the financial condition of Oregon hospitals, particularly because this is not just an isolated year of bad performance,” she says. “This is a year of challenging financial performance that was preceded by three or four years of the same.”

Hultberg acknowledged that many hospitals across the country are facing financial headwinds, but Oregon’s health systems appear to be faring worse.

“What we're seeing now that is really concerning is that the performance of Oregon hospitals have diverged from the performance of hospitals nationally,” Hultberg said in May. “So something is going on here in Oregon that is unique, and that is pushing hospitals to the brink.”

“Things aren't great anywhere, but they're particularly bad here,” she said.

Oregon’s hospitals have faced higher labor costs, tied to a state law that sets minimum staffing standards for nurses in hospitals. The law, which was passed in 2023, has added costs to hospitals.

Hultberg and other hospital leaders have said the state needs to provide more help to hospitals and health systems to meet the added costs that come with the minimum staffing requirements.

Asante pointed to the nurse staffing law in its decision to end inpatient services at Ashland Community Hospital.

“The law continues to carry a high financial cost to health care systems – without any offset from the legislature to account for lost operating revenue,” the system said on its website.

Asante also pointed to the prospect of additional state budget cuts for healthcare programs and higher licensing fees for hospitals.