Your June 7 cover story on the gap between "rich" and "poor" hospitals (p. 34) was an accurate analysis of the plight of small urban hospitals as far as it went, but it left out an important part of the story: the essential role these hospitals play in their communities.
As you noted, small urban hospitals serve a high proportion of Medicare and Medicaid patients and depend on government reimbursement for their survival, so the cuts in the Balanced Budget Act of 1997 are making it increasingly difficult for them to survive. After you list numbers such as return on investment, assets, cash on hand, liabilities and other indications that these hospitals are "low performers," you ask, "Would it be a bad thing if they closed?"
For their neighborhoods, it would be a tragedy. The fact that these hospitals are losing money is a reflection of their missions, the neighborhoods they serve and government underpayment, not their performance. These hospitals serve a population affected by massive social problems. They exist to keep their communities as healthy and stable as possible, not to make the most money.
It would be a tragedy not only for urban neighborhoods but for the healthcare system as a whole if government underpayment killed off these essential community institutions.
and HealthSystems Association