Hospital Turnover

The following information is from data obtained from the American Hospital Association (AHA) and California’s Office of Statewide Health Planning and Development (OSHPD).

The section on hospital utilization shows that hospital censuses and admissions to U.S. hospitals have declined significantly since 1981. It should come as no surprise that declining hospital censuses should lead to a lot of hospital closures as the following figures show:

Figure 1: Data from the American Hospital Association (AHA) shows that the number of community hospitals in the U.S. has declined by more than 15% since 1981. In 1981 there were just over 5,800 community hospitals in the U.S. but by 2014 that number had dropped to fewer than 5,000.

Figure 2: The number of available community hospital beds has dropped by even more. In 1983, available hospital beds in the U.S. peaked at just over 1.018 million. By 2014 that had decreased about 23% to just under 800 thousand available hospital beds indicating the the average number of beds per hospital had gone down along with the total number of hospitals in the U.S.

Figure 3: Obviously when the population of a country is increasing while the number of hospitals in that country is decreasing, the number of available hospital beds per 1,000 people will drop dramatically as this figure shows.

Figure 4: A similar trend is seen in the number of California hospitals since 1978 (from OSHPD data).

Figure 5: The reason so many hospitals closed was that declining inpatient censuses caused them to lose too much money. This graph shows the number of hospitals that had negative net margins (spent more that they earned in total revenue) each year.

Figure 6: The declining total number of hospitals is a somewhat indirect measure of how many hospitals close each year. This is because a certain number of new hospitals will open each year canceling out the net effect of some of the hospital closures that year. The above graph is from OSHPD data showing total hospital turnover* in California since 1978. Each bar shows the number of hospitals that either opened (blue bar) or closed (red bar) every four years in California. For example, between 1978 and 1981, 25 new hospitals opened and another 33 closed for a net decrease of 8 hospitals in California or an average annual decline of about two hospitals per year.

As figure 6 shows, the number of hospitals in California was somewhat stable until the late eighties with around 30 hospitals closing every four years but nearly as many opening. Between 1989 and 1993, hospital turnover began to accelerate even though the number of hospitals in California remained stable. Between 1994 and 2005, hospital closures greatly exceeded openings with 171 hospitals closing and only 33 opening in that twelve year period. In all, fewer than half (43%) of the hospitals in California in 1978 were still open in 2014 even though the total number of hospitals decreased by about 26% over that period of time.

* Hospital turnover was measured by tracking the nine digit OSHPD registration numbers for all California hospitals every four years. A new number indicates that a new hospital had opened over the preceding four year period whereas when a previously listed number ceases to be listed it’s considered a closure. Hospitals that changed registration numbers but didn’t change their ownership or name, or hospitals that simply moved to a new location were not included even though their registration number had changed.