Good Riddance to Closed Hospitals

Payment changes under the Affordable Care Act reduces the rate of growth in reimbursements for hospital services and reduces critical funding many hospitals rely on from disproportionate share and graduate medical education. These measures could strain hospital finances and accelerate widespread hospital closures.

While many believe ACA insurance expansion might offset some of the financial pressure on hospitals, many stakeholders are , ultimately worsening patient outcomes.

With limited data available examining hospital closures nationally, researchers studied Medicare cost reports and the Hospital Service Area (HSA) designations to elucidate the characteristics of hospitals that closed between 2003 and 2011, and investigate the relationship between hospital closures and patient outcomes (specifically hospitalization and mortality rates).

There were 195 hospital closures nationally between 2003 and 2011. Compared to open hospitals, closed hospitals were more often located in the south and in urban areas and were more likely to be for-profit institutions with less favorable financial margins.

When comparing patients within HSAs with hospital closures to those living in HSAs without closures, there was no association between hospital closures and worsening outcomes (measured by hospital admissions and all-cause mortality rates). Additionally, when analyzing acute hospital conditions such as stroke or trauma where added travel times should be taken into account in time sensitive conditions, they still found no significant relationship between closures and change in either admission or mortality rates. These findings conflict with a previous study showing a .

Interestingly, with myocardial infarctions specifically, the authors report significant reductions in mortality in closure HSAs compared to matched controls.

The authors offer two possible explanations for these findings. First, hospital closures could have had minimal impact on health outcomes if the closed hospitals were of inferior quality. Secondly, there may be a relative oversupply of hospital and/or physician services in areas of closures. In any case, it appears that the current health market structure and competitive forces may work reasonably well at selecting hospitals for closure.

commentary by Thiago Halmer

Abstract

The Affordable Care Act (ACA) set in motion payment changes that could put pressure on hospital finances and lead some hospitals to close. Understanding the impact of closures on patient care and outcomes is critically important. We identified 195 hospital closures in the United States between 2003 and 2011. We found no significant difference between the change in annual mortality rates for patients living in hospital service areas (HSAs) that experienced one or more closures and the change in rates in matched HSAs without a closure (5.5 percent to 5.2 percent versus 5.4 percent to 5.4 percent, respectively). Nor was there a significant difference in the change in all-cause mortality rates following hospitalization (9.1 percent to 8.2 percent in HSAs with a closure versus 9.0 percent to 8.4 percent in those without a closure). HSAs with a closure had a drop in readmission rates compared to controls (19.4 percent to 18.2 percent versus 18.8 percent to 18.3 percent). Overall, we found no evidence that hospital closures were associated with worse outcomes for patients living in those communities. These findings may offer reassurance to policy makers and clinical leaders concerned about the potential acceleration of hospital closures as a result of health care reform. PMID: 25941277

Joynt, KE et al. Health Affairs. 2015; 34 (5): 765-72.