One hospital has closed about every three months in California since the mid-1990s, and more are likely to go under in the coming months, according to a study released earlier this month by researchers at the Nicholas C. Petris Center at the University of California at Berkeley.
Twenty-three hospitals, representing 3.3% of total licensed beds in California, closed statewide from 1995 to 2000. Sixteen of those shutdowns occurred from 1998 to 2000, the study found. About 475 acute-care hospitals remain in California.
The typical facility that closed was small-11 had less than 100 beds and only five had more than 200 beds. Nonetheless, hospital industry officials said the closures are part of a rapid and dangerous deterioration of the state's inpatient infrastructure.
For example, the Healthcare Association of Southern California projects a 26% reduction in inpatient capacity in the region during the next decade. "We can't afford to lose any more infrastructure," said Jim Lott, the association's executive vice president. Lott noted that Los Angeles-area hospitals often exceeded 75% capacity.
Eleven of the hospitals that closed from 1995 to 2000 were in the Los Angeles area and four served the San Diego region, according to the study. Ironically, the largest of the failed hospitals in the study, 278-bed Long Beach Community Medical Center, is expected to reopen as Community Hospital of Long Beach by July 1, according to officials spearheading the effort.
The study didn't delve deeply into the factors that drove the closures, but with new seismic retrofitting standards and the continued shift of inpatient procedures to outpatient settings, the study's authors expect more hospitals to shut their doors in the near-term, said Rachael Kagan, publications director at the Petris Center. The cost of meeting the new state seismic standards, for example, has been estimated at $24 billion for California hospitals.
The researchers didn't project a specific number of future closures.
The finances of virtually all of the hospitals studied had plummeted precipitously in the years before closure. Three years before shutting down, half of the hospitals already reported being in the lowest 25th percentile of state hospitals based on average net patient revenue per bed. By their final year of operation, 86% of the hospitals fell within the bottom quartile. Operating margins, which had been at a median of -2% three years before closure, plunged to a median of -20% in the hospitals' final year.