As part of a restructuring that began last fall, Charter Behavioral Health Systems stopped accepting new patients at 33 hospitals last week.
The closures followed the shuttering of 18 Charter hospitals last year.
The move slims operations at the nation's largest psychiatric hospital chain to 37 facilities in 21 states, down from the 92 it operated just a year ago.
While Charter shut some of its hospitals' doors last year in response to reports of poor quality of care, the current spate of closures is largely a financial decision.
Even after shedding nearly half of its hospitals, the company indicated earnings from operations will shrink by only 15%.
Charter will remain the nation's largest psychiatric hospital chain even after the closures. It had announced plans to sell as many as 53 hospitals last September, but this was the first time the company acknowledged it would cease operating more than half its facilities.
Eight of the shuttered hospitals were in Texas. Charter now operates just one hospital in that state, a joint-venture agreement with Christus Health Santa Rosa in San Antonio.
Mark Covall, executive director of the National Association of Psychiatric Health Systems, said Charter's downsizing reflects industrywide trends.
"There has been a drastic reduction in all areas of the country in the overall dollars available to behavioral health," he said.
Charter's decision to slash the number of beds it operates and focus on developing alternatives to inpatient care also reflects the growing preference in mental health toward outpatient care, Covall said.
"Clearly there is a need to have fewer beds," he said. "At the same time it's critical we have enough inpatient capacity."
Wholesale pullouts, such as Charter's exit from Texas, could lead to bed shortages, he said.
The Alpharetta, Ga.-based chain also bowed out of most of the Midwest, leaving one facility in Indiana and none in Illinois, Kansas, Minnesota, Missouri or Wisconsin. Charter also ended its presence in Alabama, Arizona and Nevada.
In Texas, Charter's withdrawal from Corpus Christi may spur the area's only other behavioral health provider, Christus Health, to add to its 96-bed capacity. A Christus spokeswoman said that would likely be accomplished by diverting beds from its three area hospitals.
Charter is seeking an investor to provide $50 million to fund working capital and debt-service needs.
Fort Worth, Texas-based Crescent Real Estate Equities, which owns most of the Charter hospitals, has refused to supply that cash.