More than three decades after the publication of And the Wolf Finally Came: The Decline of the American Steel Industry, John Hoerr's book about the social upheaval wrought by Rust Belt deindustrialization remains as relevant as ever.
It's most relevant, of course, in places like Pittsburgh, where I live and work, and where we still bear the scars from that slow-motion economic disruption and ensuing workforce dislocation.
But it's also relevant to those of us working in healthcare, which is facing its own disruptions.
More than 100 U.S. hospitals have shuttered over the past decade, and industry experts think 1,000 more could close in the decade to come, as the conditions that have reduced margins and volumes across the country further ossify. Some of these circumstances are beyond our control–but some are due to our own resistance to change, and the same lack of foresight that doomed Big Steel.
Two intersecting trends have left the American healthcare industry ripe for disruption: First, the digitization and virtualization of medicine is changing when, where and how patients receive care.
Second, the segregation of populations by income level is creating economic catastrophes for many families and hospitals. As hospitals lose commercially insured patients and take on more Medicaid and Medicare beneficiaries, their net income decreases. Attempts to offset those losses—often at the expense of the diminishing segment of commercial clients—means healthcare costs rise faster than inflation, leaving patients with bills not covered by their health plan.
And the pandemic added oxygen to both trends.
While healthcare can't be fully outsourced to another country as a steel mill might, the digitization of medicine was already eroding the geographic borders of our traditional care model—and that was before COVID-19 made so much in our lives virtual. Overnight, a striking portion of medical visits took place remotely. The virtual evaluation of patients has increased efficiency for some fields, but has created new inefficiencies and occupancy challenges elsewhere, especially for sprawling medical campuses.
If geography doesn't matter nearly as much when it comes to the practicality of outpatient evaluations, it matters a great deal in terms of the type of patients we care for and the social determinants we encounter. As our country's rich-poor, urban-rural schism continues to widen, hospitals that care for an outsized share of graying, low-income, socially vulnerable populations simply can't make the math work.
And for many of the hospitals already teetering on the edge of insolvency, revenue and net income losses caused by the pandemic proved irreparable.
In 2020 alone, 20 rural hospitals closed, from Texas to Tennessee and beyond. One of them was close to home. The mortgage on the shuttered Ellwood City (Pa.) Medical Center was recently sold to a "cannabis-focused boutique investment firm" (talk about a sign of the economic times). And the building where I now work, the former Suburban General Hospital in Bellevue, Pa., has been mostly empty since 2010.
When hospitals close, it is not just the access to care that disappears. As with the mills, these hospitals are often the largest employers in town. And as community pillars topple, high-paying, family-sustaining jobs vanish. In Pittsburgh, we've seen this movie before.
As elected officials in Washington, D.C., debate a once-in-a-generation infrastructure overhaul, the focus has been on rebuilding the neglected infrastructure of the past. But we also need to prepare for the opportunities and the disruptions looming on the horizon, especially in healthcare.
That means not just rebuilding, but reinventing legacy community infrastructure, such as hospitals, so that we may continue to serve our constituents in new ways.
At Suburban General, for example, we are partnering with a state-supported business accelerator to remake the former hospital space into an "innovation hub" for biotech and life-science startups. Over time, Suburban—which was built in the early 1900s—will again become a foundational civic asset, strengthening our local economy while tackling the root causes of health disparities and rebuilding trust with our community.
Not every old hospital will become an innovation hub, obviously. But with some creative repurposing and strategic investment, these structures can still play a key role in our industry's transformation from a geographically driven "sick-care system" into a digitally driven, 21st century healthcare system.
We have to do it soon, though. Because the wolf is at the door.
