What Happens When Hospital-Based Skilled Nursing Facilities Close? A Propensity Score Analysis

Objective. To assess the effects of hospital-based skilled nursing facility (HBSNF) closures on health care utilization, spending, and outcomes among Medicare fee-for-service beneficiaries.
Data Sources. One hundred percent Medicare fee-for-service claims files for 1997–2002 were merged with Medicare Provider of Services files and beneficiary-level enrollment records.
Study Design. Medicare spending, the use of postacute care, and health outcomes, were compared among hospitals that did and did not close their HBSNFs between 1997 and 2001. Hospitals were stratified according to propensity scores (i.e., predicted probability of closure from a logistic regression) and analyses were conducted within these strata.
Principal Findings. HBSNF closures were associated with increased utilization of alternative postacute care settings, and longer acute care hospital stays. Because of increased use of alternative settings, HBSNF closures were associated with a slight increase in total Medicare spending. There are no statistically robust associations between HBSNF closures and changes in either mortality or rehospitalization.
Conclusions. HBSNF closures altered utilization patterns, but there is no indication that closures adversely affect beneficiaries' health outcomes.     

Rural Health Research Community Perceptions of the Effects of Rural Hospital Closure on Access to Care

The purpose of this case study was to ascertain the perceptions of health professionals who were located in six rural communities where hospital closure occurred, regarding the impact of closure on community residents. These health professionals were asked to respond to questions about effects of hospital closures on the availability of medical services such as emergency care, physician services, hospital services and nursing home care. To control for trends in medical services utilization that were unrelated to hospital closure, the study design included comparison areas where similar hospitals remained open. A standardized questionnaire was administered to three health professionals in each of the areas that experienced a hospital closure and also in the matched comparison areas. Interviews of the health professionals in closure areas provide evidence suggestive of some perceived negative effects of hospital closure on these communities. These negative effects include difficulty recruiting and retaining physicians, concern of residents about the loss of their local emergency room, and increased travel times to receive hospital services. The perceived effects of closure appeared to be mediated by the distance required for travel to the nearest hospital. Respondents perceived increased travel times to most significantly affect vulnerable populations, such as the elderly, the disabled and the economically disadvantaged. Respondents in the majority of comparison areas also reported access barriers for vulnerable populations. These barriers primarily center on problems of obtaining transportation and enduring the rigors of travel. Improvements in the availability of transportation to medical care may offer some stabilization to communities where hospitals closed; however, it also is the case that transportation improvements are needed to increase access to care in rural communities where hospitals remained open.     

Access to care in rural America: impact of hospital closures

This article employs a quasi-experimental, pre/post comparison group design to determine whether rural hospital closures (n = 11) have had a detrimental impact on access to inpatient and outpatient care for the Medicare population. Closure areas experienced a significant decrease in medical admissions, although admission rates remained higher than in comparison areas. Physician services were not found to substitute for inpatient services following a closure. No adverse impacts on mortality were observed. Patients in closure areas were more likely to be admitted to urban teaching hospitals following the closure of their local hospital.     

Small Rural Hospitals with Long-Term Care: 1983 to 1987

Rural hospitals were under tremendous stress in the 1980s, as evidenced by decreasing use and closures. Rural populations increased in the two proportions of people older than 65 years relative to urban areas. Rural communities had more chronically ill residents than urban areas. Population aging and hospital stress have opened an option for small rural hospitals to develop long-term care units. Analysis of a national cohort of 750 small rural hospitals was undertaken in 1983, 1985, and 1987 to identify the characteristics of these hospitals, their communities, and the relative contribution of the small rural hospital to long-term care bed supply. Hospitals more likely to have long-term care during this period of time had lower occupancy rates and higher expenses per admission both prior to and after developing long-term care. While only 14 percent of the 750 hospitals studied had long-term care, they contributed nearly 30 percent of the total long-term care bed supply in their counties. Population-based need and bed supply measures were not significantly different in counties having a small rural hospital with long-term care. Areas of further analysis of the small rural hospital as a resource for long-term care are suggested. The implications for the health care system of small rural hospitals with long-term care are discussed.     

The effect of rural hospital closures on community economic health

OBJECTIVE: To examine the effect of rural hospital closures on the local economy. DATA SOURCES: U.S. Census Bureau, OSCAR, Medicare Cost Reports, and surveys of individuals knowledgeable about local hospital closures. STUDY DESIGN: Economic data at the county level for 1990-2000 were combined with information on hospital closures. The study sample was restricted to rural counties experiencing a closure during the sample period. Longitudinal regression methods were used to estimate the effect of hospital closure on per-capita income, unemployment rate, and other community economic measures. Models included both leading and lagged closure terms allowing a preclosure economic downturn as well as time for the closure to be fully realized by the community. DATA COLLECTION: Information on closures was collected by contacting every state hospital association, reconciling information gathered with that contained in the American Hospital Association file and OIG reports. PRINCIPAL FINDINGS: Results indicate that the closure of the sole hospital in the community reduces per-capita income by 703 dollars (p<0.05) or 4 percent (p<0.05) and increases the unemployment rate by 1.6 percentage points (p<0.01). Closures in communities with alternative sources of hospital care had no long-term economic impact, although income decreased for 2 years following the closure. CONCLUSIONS: The local economic effects of a hospital closure should be considered when regulations that affect hospitals' financial well-being are designed or changed.     

Closing rural hospitals in Saskatchewan: on the road to wellness?

Rising health care costs at a time of economic stagnation, federal cutbacks to Medicare, and an obsession with budget deficits at all levels of government have contributed to a sense of urgency to reform the Canadian health care system. Accompanying these economic and political motivations for reform, has been a shift in our understanding of health and well-being that lays less emphasis on the institutionalization and medicalization of health care. As part of its wellness approach to health, the Saskatchewan government in 1992 announced the closure and conversion of 52 small rural hospitals to wellness centres as part of a shift from institutional care to community based care. While the health costs and benefits of this shift are contested, the paradox is that closing rural hospitals may have unrealized health and social costs because of the psychological and community importance of hospitals to the meaning of place. This paper begins with a review of the meaning and importance of local institutions for communities. It is clear from this starting point that the debate about the economic and health benefits and costs of rural hospital closures is a limited basis for understanding hospital closures. Finally, the history of Saskatchewan hospitals and a narrative of the recent closures of rural hospitals drawn from a sampling of provincial newspapers and oral discussions highlights the need to understand the hospital closure in terms of its impact on health irrespective of the medical impacts.     

Access implications of rural hospital closures and conversions

This article examines the effects of rural hospital closures and conversions on various structural dimensions of access. Based on a data set of rural hospitals in Texas during the period 1985-1990, the results indicate that closure or conversion typically had relatively little detrimental effect on hospital services and distance to alternative sources of care, but hospital bed and physician availability may have been adversely affected in certain cases. Rural hospital conversions to alternative types of health care facilities, such as ambulatory care clinics, do appear to have maintained the availability of a restricted set of medical services in some rural areas.     

Inner-city hospital closures/relocations: race, income status, and legal issues

Hospital closures/relocations are occurring with increasing frequency in the United States and these actions are alleged to have adverse consequences for racial-minorities and low-income individuals. This paper through an examination and review of the literature discusses the reasons why hospitals close/relocate, examines the legal issues and questions that have arisen over decisions leading to hospital closures/relocations and discusses the implications of hospital closures/relocations on the health care of inner-city minorities and low-income individuals. The conclusion suggests that for inner-city indigents hospital closure/relocations means only one thing--a decline in hospital care. If the present trend in hospital closures/relocations continues, a few for-profit hospital chains may have the responsibility for determining community health needs based on what services are most profitable and who will be the recipient of these services.     

Impact of rural hospital closures in Saskatchewan, Canada

Canada's health care system has undergone major changes since 1990. In Saskatchewan, 52 small rural hospitals funded for less than eight beds stopped receiving funding for acute care services in 1993. Most were subsequently converted to primary health care centers. Since then, concerns have been raised about the impact of the changes on rural residents' access to care, their health status, and the viability of rural communities. To assess the impact of hospital closures on the affected communities, we conducted a multi-faceted, province-wide study. We looked at hospital use patterns, health status, rural residents' perceptions of the impact of these hospital closures, and how communities responded to the changes. We found the hospital closures did not adversely affect rural residents' health status or their access to inpatient hospital services. Despite widespread fears that health status would decline, residents in these communities reported that hospital closures did not adversely affect their own health. Although some communities continue to struggle with changes to health care delivery, others appear to have adapted as a result of strong community leadership, the development of widely accepted alternative services, and local support for creating innovative solutions. Good rural health care does not depend on the presence of a very small hospital that cannot, in today's environment, provide genuinely acute care. It requires creative approaches to the provision of primary care, good emergency services, and good communication with the public on the intent and outcomes of change.     

Changes in service availability in california hospitals, 1995 to 2002

Hospitals face serious financial challenges in the current healthcare marketplace. In response to these challenges, they may alter their service offerings, eliminating services that are perceived as money-losing or adding new services in areas where profitability is expected to be greater. Although research has examined hospital closures, the more subtle phenomenon of hospital service changes has not been systematically studied. This issue is important because different types of hospital service changes could have different effects on hospital financial viability: extensive service closures could contribute to a downward spiral leading to hospital closure, whereas adding new services might help improve a hospital's finances. This article' examines changes in hospital service availability in California general acute care hospitals between 1995 and 2002. Our major findings indicate that many California hospitals made changes in their service offerings during the study period, although few made extensive changes. Altogether, about half of the hospitals in our study population either closed or opened at least one service. Nearly one-fourth of the hospitals in our study population closed one or more services, whereas just under one-third opened one or more new services. However, the vast majority of the hospitals that closed or added a service made only one or two such changes. In addition, few hospitals both closed and opened services. The service closed most frequently was normal newborn labor and delivery (obstetrics), whereas inpatient rehabilitation was the most frequently opened service. Hospitals that made the most service changes tended to be small, rural, and financially troubled at the start of the study period. Among this group of hospitals, service closures were associated with continued financial deterioration, whereas new service openings were associated with improvements in key financial ratios.     

An assessment of rural hospital trustees' health care knowledge base.

Rural hospital trustees are usually volunteers who serve important roles in the governance of a hospital and, therefore, in defining health care policy in their communities. Because most trustees are not health professionals, their orientation to the hospital and continuing education about the hospital present a special challenge to administrators. One hundred and three trustees from 10 rural hospitals in western New York were surveyed to better understand their demographics, their knowledge base regarding the hospital, and their roles as trustees. Sixty-six percent of the respondents were male and the average age of the sample was 48 years. Trustees had served an average of six years and spent seven hours per month on hospital business. Eighty-three percent recalled receiving some orientation. Answers about average hospital census, length of stay, payor type, and hospital services were correct less than 50 percent of the time. Trustees were aware that recent quality assurance guidelines increased their liability and half believed it was their most important activity. We conclude that greater effort should be applied to the orientation and continuing education of hospital trustees. Given the significant time commitment already asked of trustees, this education should be woven into the hospital governance routine.     

Effects of market position and competition on rural hospital closures.

OBJECTIVE: To examine the dynamic effects of competition and hospital market position on rural hospital closures. DATA SOURCE/STUDY SETTING: Analysis of all rural community hospitals operating between 1984 and 1991, with the exception of sole-provider hospitals. Data for the study are obtained from four sources: the AHA Annual Surveys of Hospitals, the HCFA Cost Reports, the Area Resource File, and a hospital address file constructed by Geographic Inc. DATA COLLECTION AND ANALYSIS: Variables are merged to construct pooled, time-series observations for study hospitals. Hospital closure is specified as a function of hospital market position, market level competition, and control variables. Discrete-time logistic regressions are used to test hypotheses. PRINCIPAL FINDINGS: Rural hospitals operating in markets with higher density had higher risk of closure. Rural hospitals that differentiated from others in the market on the basis of geographic distance, basic services, and high-tech services had lower risks of closure. Effects of market density on closure disappeared when market position was included in the model, indicating that differentiation in markets should be taken into account when evaluating the effects of competition on rural hospital closure. CONCLUSIONS: Our findings suggest that rural hospitals can reduce competitive pressures through differentiation and that accurate measures of competition in geographically defined market areas are critical for understanding competitive dynamics among rural hospitals.     

Hospital closure: an efficiency analysis

Logistic regression analysis was used to test the hypothesis that market forces have led to recent hospital closures. Specifically, inefficient and underutilized hospitals in competitive markets were hypothesized to be at greater risk for closure. While past studies used crude measures of hospital efficiency to predict closure, this study used data envelopment analysis to construct an efficiency index. Mixed support was found for the market forces hypothesis; however, contrary to expectations, inefficient hospitals were not shown to be at increased risk for closure. In fact, efficiency proved to be a weak, but positive, predictor of closure.     

Neighborhood characteristics and hospital closures: A comparison of the public,private and voluntary hospital systems

This paper analyzes the neighborhood distribution of hospital closures in New York City between 1970 and 1981. Discriminant analysis procedures are used to compare the social, economic and health status characteristics of neighborhoods in which hospitals have closed with those of neighborhoods in which facilities have remained open. The results show that overall hospital closures have had a substantial distributional impact, with facilities in low-income, high infant mortality neighborhoods having the highest rates of failure. Closure of voluntary hospitals occured most frequently in disadvantaged neighborhoods; whereas municipal and proprietary hospital closures showed no differential neighborhood impact. Implications for the geographical accessibility to various groups to health care and for the efficiency and cost of hospital services are discussed.     

Determinants of hospital closure in South Korea: use of a hierarchical generalized linear model

Understanding causes of hospital closure is important if hospitals are to survive and continue to fulfill their missions as the center for health care in their neighborhoods. Knowing which hospitals are most susceptible to closure can be of great use for hospital administrators and others interested in hospital performance. Although prior studies have identified a range of factors associated with increased risk of hospital closure, most are US-based and do not directly relate to health care systems in other countries. We examined determinants of hospital closure in a nationally representative sample: 805 hospitals established in South Korea before 1996 were examined-hospitals established in 1996 or after were excluded. Major organizational changes (survival vs. closure) were followed for all South Korean hospitals from 1996 through 2002. With the use of a hierarchical generalized linear model, a frailty model was used to control correlation among repeated measurements for risk factors for hospital closure. Results showed that ownership and hospital size were significantly associated with hospital closure. Urban hospitals were less likely to close than rural hospitals. However, the urban location of a hospital was not associated with hospital closure after adjustment for the proportion of elderly. Two measures for hospital competition (competitive beds and 1-Hirshman--Herfindalh index) were positively associated with risk of hospital closure before and after adjustment for confounders. In addition, annual 10% change in competitive beds was significantly predictive of hospital closure. In conclusion, yearly trends in hospital competition as well as the level of hospital competition each year affected hospital survival. Future studies need to examine the contribution of internal factors such as management strategies and financial status to hospital closure in South Korea.     

Hospital Mergers and Closures: Survival of Rural Hospitals

There are two major models to save financially failing rural hospitals: (1) expanding through an affiliation or merger with other hospitals to increase the utilization and diversity of services, or (2) downsizing by employing the limited-service model and providing only emergency and primary care service with limited acute care. This study investigates hospital mergers and closures from 1990 to 1992 using the American Hospital Association's (AHA's) data from the Annual Survey of U.S. Hospitals. The presence of potential scale and scope economies among merging and closing hospitals prior to the merger or closure suggests that rural hospitals are operating at a size level that has great potential for achieving scope and scale efficiencies through mergers.     

Rural community hospitals and factors correlated with their risk of closing

The issue of rural hospital closings in the United States in recent years has become of increasing concern to health care policy analysts. Rural communities face unique health needs, necessitating access to local health care. Much has been written about the social, economic, legislative, and technological changes that have increased the stress on rural hospitals in the 1980s. However, quantifiable models have been lacking with which to examine in detail factors associated with rural hospitals and to correlate such factors with individual hospitals' risks of closing. In this study, we identify variables correlated with rural community hospital closures in the period 1980-87. Using epidemiologic case-control methods, 161 closed rural hospitals were matched 1 to 3 with a control group of 483 rural hospitals which remained open during the same period. A series of hospital performance indicators and demographic, economic, and social community variables were entered into a multiple logistic regression model. Four variables were found to be positively correlated with risk of closure. They are for-profit ownership; nongovernment, not-for-profit ownership; presence of a skilled nursing or other longterm care unit; and the number of other hospitals in the county. Variables negatively correlated with risk of closure were accreditation by the Joint Commission on the Accreditation of Healthcare Organizations, the number of facilities and services, and membership in a multihospital system. Policy and research implications at the Federal, State, and local levels are discussed.     

Future financial viability of rural hospitals

Policymakers are concerned that some rural hospitals have suffered significant losses under the Balanced Budget Act (BBA) of 1997 and that access to inpatient and emergency care may be at risk. This article projects that the median total profit margin for rural hospitals will fall from 4 percent in 1997 to between 2.5 and 3.7 percent after the BBA, Balanced Budget Refinement Act (BBRA) of 1999, and Benefits Improvement and Protection Act (BIPA) of 2000 are fully implemented in 2004. The Critical Access Hospital (CAH) Program is expected to prevent reductions in inpatient and outpatient prospective payments from causing an increase in rural hospital closures.     

Rural hospital closures and access to services

This article examines the implications resulting from the closure of 25 rural hospitals during 1990. The implications are evaluated by estimating travel distance and time to the nearest open hospitals. In addition, the types of services offered in the hospitals studied were measured to provide a view of potential change in access to services. The average travel distance and time to the nearest hospital after closure was 25.7 miles and 30.2 minutes, respectively. In most cases, the remaining hospitals offered a broader scope of services than did the hospitals that closed. A possible interpretation is that the hospital closures resulted in a tradeoff between breadth of services and rapid access for emergency conditions.     

Low-quality, high-cost hospitals, mainly in South, care for sharply higher shares of elderly black, Hispanic, and medicaid patients

As policy makers design national programs aimed at managing the quality and costs of health care, it is important to understand the potential impact on minority and poor patients and the hospitals that provide most of their care. We analyzed a range of hospital data and assigned hospitals to various categories, including "best"-high-quality, low-cost institutions-and "worst"-where quality is low and costs high. We found that the "worst" hospitals-typically small public or for-profit institutions in the South-care for double the proportion (15 percent versus 7 percent) of elderly black patients as the "best" hospitals-typically nonprofit institutions in the Northeast. Similarly, elderly Hispanic and Medicaid patients accounted for 1 percent and 15 percent, respectively, of the patient population at the best hospitals, while at the worst hospitals, these groups represented 4 percent and 23 percent of the patients. Patients with acute myocardial infarction at the worst hospitals had 7-10 percent higher odds of death compared to patients with those conditions admitted to the best hospitals. Our findings have important implications for Medicare's forthcoming value-based purchasing program. The worst institutions in particular will have to improve on both costs and quality to avoid incurring financial penalties and exacerbating disparities in care.