Two rural Catholic hospitals in Illinois, St. Margaret’s Health in Peru and Spring Valley are closing due to a 2021 cyberattack, staffing shortages, and the COVID-19 pandemic. The closure is the first to be linked to a cyberattack. The hospitals have signed a letter of intent with OSF Healthcare to purchase the Peru campus, pay off debt, and ensure the continuation of Catholic healthcare in the area. The closures are part of a larger trend of rural hospital closures due to a variety of factors, including financial constraints and the impact of the pandemic.
Two rural Catholic hospitals in Illinois will cease all operations starting Friday, June 16. This decision is partly due to a cyberattack that occurred in 2021.
St. Margaret’s Health, located in Peru and Spring Valley, announced on its website that it will be closing down all current operations on Friday, June 16. Sister Suzanne Stahl, the director of provincial at the Sisters of Mary of the Presentation, expressed deep sadness about the closure in a Facebook video posted in May. She cited several reasons for the closure, including the COVID-19 pandemic, the cyberattack on the hospital’s computer system, and a shortage of staff.
To ensure the continuity of Catholic faith-based healthcare in the Illinois Valley and surrounding areas, St. Margaret’s Health has signed a nonbinding letter of intent with OSF Healthcare to acquire the Peru campus, along with ambulatory facilities and clinics. The proceeds from this agreement will help alleviate St. Margaret’s debt.
According to the notice on St. Margaret’s Health’s website, both the SMH Peru and Spring Valley locations will cease all operations, including the hospital, clinics, and other facilities, at 11:59 p.m. on Friday, June 16, 2023. The notice advises patients in need of emergency care to call 911, while other inpatient and outpatient services can be obtained at OSF locations in Mendota, Princeton, and Ottawa.
The closure of these hospitals is notable as it marks the first known instance where a cyberattack directly led to the closure of a healthcare facility. In 2021, a ransomware attack affected SMP Health, which encompasses St. Margaret’s Health hospitals. This attack disrupted the hospital’s ability to submit claims to insurers, Medicare, or Medicaid for several months, resulting in severe financial difficulties.
Sister Suzanne Stahl, however, emphasized that the closure of rural hospitals is a widespread issue across the nation. Numerous rural hospitals have already closed due to various challenges. The American Hospital Association reported that from 2010 to 2021, 136 rural hospitals closed, with a record 19 closures in 2020 alone. Low reimbursement, staffing shortages, low patient volume, regulatory barriers, and the ongoing financial strain caused by the COVID-19 pandemic all play a role in these closures. Additionally, rising labor, drug, supply, and equipment costs have exacerbated the challenges that rural hospitals face in providing healthcare to their communities.
Cyberattacks not only jeopardize patient safety but also impose significant financial burdens on hospitals. According to a study by the Ponemon Institute, the average cost of a healthcare cyberattack over the past 12 months was $4.4 million, including $1.1 million in productivity losses.
