THE BUREAU OF NATIONAL AFFAIRS: DAILY REPORT FOR EXECUTIVES - JULY 1, 2002
HEALTH CARE POLICY REPORT
HHS Reports 64 Hospitals Closed in 2000, Cites Financial Stress Caused by Competition
Sixty-four hospitals in the United States closed in 2000, primarily because of financial stress, the Department of Health and Human Services Office of Inspector General said in a report released June 28.
The IG attributed the financial stress to competition and low occupancy. However, 19 of the closures resulted from mergers or hospital organizations. Two hospitals cited reductions in Medicare or Medicaid payments, but neither said that was the sole cause.
The report, Hospital Closure 2000 (OEI-04-02-00010), found that while the same number of hospitals closed in 2000 as in 1999, seven more hospitals opened or reopened in 2000 (29) than in 2999 (22). Twenty-two of the hospital closures in 2000 were in rural areas and 42 in urban areas.
The report, prepared by the IG's Office of Evaluation and Inspections, also said hospital closings did not have a large impact on patients because other hospitals were available for inpatient care and emergency services. In half of the affected communities, an alternate hospital was located within three miles--in only one case was the next closest hospital more than 30 miles away.
"The hospital field continues to decrease in size," a spokeswoman for the American Hospital Association said. She said statistics used to gauge the impact on patients might not be sufficient because "the impact is unique in every community."
In the rural hospitals that closed, Medicaid utilization--defined as the percent of Medicaid patient days compared to total days--was higher than the national average, but Medicare utilization was lower, according to the report's statistics.
Conversely, in the closed urban hospitals, Medicaid utilization was lower than the national average while Medicare utilization was higher.
The report also found that in 20 cases after the hospital closed, the building continued to be used for health-related services, such as a health clinic, outpatient facility, or rehabilitation center.
