The number of acute-care hospital closings dropped for the fifth consecutive year in 1993 to the lowest total in more than a decade, according to the American Hospital Association's latest hospital closure report.
The report, which was released last week, also revealed that the number of new acute-care hospitals that opened for business hit its highest level since 1990, when the AHA began reporting hospital openings.
The report is another indication that the hospital industry's financial situation not only has stabilized since the mid-1980s but has improved substantially over the past several years.
For example, aggregate hospital profits rose more than 18% from 1991 to 1992 to nearly $12 billion, according to AHA figures (Dec. 6, 1993, p. 2). That followed a 23% increase in aggregate profits in 1991 over 1990 figures. And, hospital profit margins through the third quarter of last year hit their highest level since 1986, AHA data show (March 7, p. 34).
The AHA said 34 acute-care hospitals closed last year, compared with 39 in 1992 (See chart). The highest one-year closure total was 85 in 1988. The lowest one-year total occurred in 1982 and 1983 when 24 closed each year.
When the rate of hospital closures peaked in the mid- to late 1980s, the hospital industry, led by the AHA, cited the growing number of closings as evidence of inadequate Medicare payments, inadequate Medicaid payments and higher uncompensated-care costs. But a number of independent and government studies since then have rebutted those arguments.
In its report, the AHA said, "Each closure is the result of a combination of factors, many of which are unique to the individual hospital and its community. Detailed local-level analysis is necessary to understand the impact of any hospital closure in terms of access to care and costs."
In addition to the 34 acute-care facilities that closed last year, 28 specialty hospitals stopped providing services. They include inpatient rehabilitation and psychiatric hospitals. The 28 specialty hospital closures represent the highest one-year total since 1984, when 31 specialty facilities shut their doors.
However, nearly offsetting the number of specialty hospital closures was the opening of 23 new specialty facilities.
And partially mitigating the acute-care closures was the opening of 17 new general medical and surgical hospitals, the AHA said. By comparison, a total of just 15 acute-care hospitals opened between 1990 and 1992, according to the AHA data.
Meanwhile, of the 34 acute-care hospitals that closed last year, 19, or 56%, were in rural areas. The rest were in urban areas. In 1992, the figures were similar, with 21, or 54%, of the hospitals that closed being in rural areas.
The AHA's 1993 closure report also revealed:
Sixteen, or 47%, of the 34 shuttered acute-care hospitals continued to offer some form of ancillary healthcare after they ended inpatient operations.
Twenty-one, or 62%, of those hospitals were not-for-profit, non-government-owned facilities. Seven were government-operated, and only six were investor-owned.
Thirty, or 88%, of the 34 hospitals had fewer than 100 staffed beds. A total of 1,752 staffed acute-care beds were lost because of closure.
Texas suffered the highest number of closures with six, the AHA said. Iowa, Michigan and Mississippi followed with three each.
In a separate report released before the AHA report, the Texas Hospital Association said 14 hospitals closed in the state in 1993. Eight were acute-care facilities; six were specialty hospitals. Despite the discrepancy in the THA's and AHA's data, Texas often has led the nation in annual closures.