As hospitals increasingly lose patients to medical care delivered in clinics and home settings, hospital operators are escalating their efforts to shrink capacity.
Hospitals are operating with fewer beds or closing outright, in some cases to make way for new ambulatory-care centers. In Lakewood, Ohio, where chronic conditions such as heart disease and diabetes are just as prevalent as in the rest of the country, the city is about to close its only hospital, whose 200 beds are typically half empty.
With three other hospitals within seven miles, the low occupancy rate makes city-owned Lakewood Hospital the high-cost provider in the area. “That's not sustainable or competitive,” said Lakewood Mayor Mike Summers, a hospital trustee.
Last month, the city announced it will replace the hospital with a $34 million ambulatory health center and emergency department. The proposal is a lower-cost, more accessible alternative. The new center will bring another 16 primary-care doctors to a community grappling with diabetes, obesity, heart disease and mental illness. “None of those would you lay in a bed to fix,” Summers said.
Behind closures like Lakewood's are the boom in high deductibles, better technology, more case management and shrinking reimbursement. While hospital admissions and lengths of stay have been falling for years, decline in U.S. hospital capacity has not kept pace. And overall hospital employment has been rising.
But that could change over the next few years. New public policy and marketplace incentives are encouraging health systems to promote prevention and keep patients with chronic diseases out of the hospital. The shift to outpatient care, underway for decades, is accelerating.
New technology and better drugs also are allowing more patients to receive treatment outside of hospitals. Meanwhile, discretionary surgeries and other procedures are still being postponed since household finances remain stressed, partly because of poor wage growth in the wake of the Great Recession, and partly because more workers are being shifted to high-deductible health insurance plans, which increase household medical bills.