Hospital mergers, the emergence of managed care and increases in outpatient procedures are a few of the trends underlying the steady decline in the number of U.S. acute-care hospitals in the past 25 years.
According to the American Hospital Association, there were 5,875 community hospitals in 1975, compared with 4,956 in 1999, the latest year for which data are available. That's a drop of 919 hospitals, or 16%, compared with 1975. Looking back over the years, the late 1980s saw the highest levels of closures. In 1988, closures reached a peak of 88, more than half of them rural, according to data from HHS.
More recently, fewer rural hospitals have been shuttered, but the number of urban facilities that have fallen prey to Medicare and Medicaid cutbacks and managed care has risen. Some rural hospitals may be staying open thanks to the aggressive acquisition strategies of several for-profit hospital chains that focus exclusively on rural markets, and also from Medicare's 2-year-old critical access designation, which allows the smallest rural facilities more favorable reimbursements.
In 2000, 44 acute-care facilities closed their doors, according to data compiled by Modern Healthcare. Of those facilities, all but six were urban. According to recently released numbers from the inspector general's office, hospital closures reached a 10-year peak in 1999, with 64 hospitals ending acute-care services that year.