A Crisis That Spans Counties and Careers
Medicaid cuts and the healthcare workforce crisis are colliding across the U.S.—and the impact is felt far beyond rural counties. In towns where Medicaid is a lifeline, cuts are forcing hospitals to reduce staff, eliminate services, or shut down entirely. But displaced workers and patients don’t vanish—they shift into urban markets, pushing already strained hospitals to the brink.
At The AGA Group, we’ve seen firsthand how these changes are altering the job landscape in Missouri and Kansas. This article explores how Medicaid cuts and the healthcare workforce are intertwined—and what healthcare leaders must do now to prepare.
Why Are Rural Hospitals Closing?
For rural hospitals, Medicaid isn’t just helpful—it’s essential. When funding is reduced, these facilities are often the first to suffer. Many are operating on razor-thin margins. Even a slight decrease in reimbursement can lead to immediate consequences. Staff layoffs, reductions in outpatient services, and full hospital closures are becoming more common.
According to the National Rural Health Association, more than 150 rural hospitals have closed since 2005. These closures don’t just eliminate local access to care. They also displace experienced healthcare professionals, many of whom are forced to either relocate or leave the field entirely.
How Urban Hospitals Are Feeling the Pressure
The shutdown of rural hospitals doesn’t reduce healthcare demand—it redistributes it. Urban emergency rooms, urgent care centers, and specialty clinics are seeing rising numbers of rural patients, often without any increase in funding or staffing. This new influx is stretching urban systems past their limits. As a result, burnout is growing. Nurses and technicians are clocking longer hours. Providers are managing higher caseloads. HR departments are being tasked with filling gaps at record speed. Meanwhile, onboarding is becoming more difficult as displaced rural workers enter urban systems without a clear path forward.
How Medicaid Cuts Disrupt the Workforce
Medicaid cuts and the healthcare workforce don’t just intersect—they collide. Workers from closed rural hospitals often migrate to urban centers or pursue temporary roles like travel nursing. Others leave healthcare entirely. These decisions increase turnover and challenge the stability of hospital teams.
Urban facilities are also losing staff to burnout. With more patients and fewer providers, leadership teams are forced to reassign roles, change schedules, and manage morale. This creates a revolving door effect. As soon as new hires are onboarded, others are burned out and leave.
What Can Employers Do to Stabilize Staffing?
There’s no single solution, but employers who adapt now can avoid major disruptions later. First, hospitals need to build staffing models that offer flexibility. This means creating temp-to-perm pathways and working with partners who can deliver credentialed, vetted professionals fast.
Second, hospitals should invest in employee well-being. Mental health support, transparent communication, and retention incentives can go a long way toward maintaining team cohesion. Lastly, proactive planning—not reactive hiring—should be the default approach. Workforce planning will be critical.
The AGA Group’s “Staffing Insurance” Approach
At The AGA Group, we believe staffing should be a stabilizing force during times of uncertainty. That’s why we offer what we call “staffing insurance.” It’s a model that helps hospitals plan ahead, fill gaps fast, and reduce risk.
With over 45 years of experience placing healthcare professionals across Kansas and Missouri, we specialize in supporting both rural and urban systems. Our team handles the credentialing, compliance, and onboarding—so your team can focus on patient care.
Why Action Is Needed Now
If your healthcare organization hasn’t been affected yet by Medicaid cuts and the healthcare workforce crisis, consider this your early warning. The systems that will thrive are the ones that plan, partner, and protect their workforce.
Whether you need a short-term nurse, a full-time hygienist, or a director of operations, The AGA Group is ready to support your team with high-touch, customized solutions.
To better understand how these policy shifts are shaping hiring trends, review recent data from KFF and the American Hospital Association.
About the Author
Greg Ikner is President of The AGA Group, a boutique, high-touch healthcare staffing firm based in Kansas City. With over 45 years of recruiting experience in medical, dental, and executive search, Greg is a trusted advisor to healthcare employers navigating complex workforce challenges in Missouri, Kansas, and beyond.
