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Hospital Closures

As the nation's healthcare system continues to evolve, the role and need for hospitals is changing. Sophisticated patient care technology is no longer the exclusive domain of hospitals. Some of the most advanced breakthrough technology does not require traditional healthcare settings. The pharmaceutical sector has grown, basing its economic justification on the ability to prevent hospital care. Physicians and a variety of commercial ventures have become competitors for the business of healthcare that once routinely went to hospitals. As a result of these changes, many hospitals may be at risk of closing in the future. Therefore, it is important for health services researchers to assess both the factors associated with hospital closures and the effect that those closures have on the community a hospital serves.

There have been several evaluations of the determinants associated with hospital closings. There is also some literature concerning the impact of hospital closings on other available institutional services, as well as the economic impact of hospital closings on the community. However, there is very little literature evaluating the specific health impacts of hospital closings on the populations remaining in their former service areas.

This entry begins by presenting recent hospital trends and defining hospital closure. Then, it discusses the roles of hospitals and the causes and implications of hospital closures.

National Hospital Trends

The number of community hospitals in the nation and their beds has steadily declined since 1975. In 1975, there were nearly 5,900 community hospitals with nearly 950,000 beds. In 2005, however, there were fewer than 5,000 community hospitals (a 15% drop) with about 800,000 beds (a 16% drop). Yet the number of patients admitted to the nation's community hospitals during this time period increased from 33.4 million in 1975 to 35.2 million in 2005 (a 5% increase). Despite the increase in the number of patients admitted during this same time period, there was a dramatic decline in the average length of inpatient hospital stays. In 1975, community hospitals accounted for more than 250 million inpatient days of care. In contrast, in 2005, the number had declined to fewer than 200 million days of care (a 25% drop).

At the national level, changes in technology and economics have altered the demand for inpatient hospital care, and hospital closings have not been as rapid as the changes in the marketplace. The resulting occupancy rate of community hospitals in the nation declined from an average of 75% in 1975 to 67.3% in 2005. While this brief view of national statistics would seem to alleviate concern that hospital closures are a troublesome phenomenon, the issue is, in reality, more complex. Local variations, in several metropolitan areas, have demonstrated the impact of hospital bed reductions on increasing bypass hours to trauma centers, loss of emergency service capacity, and the spreading instability of charity care that moves from closed hospitals to remaining neighboring hospitals.

Defining Hospital Closure

Hospital closure can be defined in two ways. It can be defined as the decommissioning of a physical facility that has routinely provided inpatient health services for a community. Such a hospital is simply no longer there. Hospital closure can also be defined as the elimination of all available beds in a facility that have been designated for the type of care the facility has routinely provided. Such a hospital building may still remain standing, but the services it provided no longer exist. For example, a community hospital may be replaced by a skilled-nursing facility or a behavioral-health facility. In either case, the elimination of hospital beds serving the original purpose has taken place. The effect of each type of hospital closing is not entirely the same, and to understand the significance of the closure, one must recognize the various roles and the impact of a hospital on its community.

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