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Loss and Change: Why more hospitals will close

Loss and Change: Why more hospitals will close March 26, 2014Leave a comment

Marketing, research and business development consultant in healthcare, human services and senior living.

While it is sad to see communities lose the employment and associated resources when hospitals close, it is difficult to fight against the laws of supply and demand. The so-called “safety net” hospitals aside, there are hospitals scattered throughout this and every state in the nation which were developed opportunistically when demographics, and hospital payments were very different than they are today. Across the country, hospital rates have hardly been robust.

Loss and Change: Why more hospitals will close

While our population is aging, the demographics of the older cohorts (75+), is not in hospitals’ favor. Because of the birthrate decline during the Great Depression, the number of individuals who are currently 75 to 84 years of age is actually declining.

Also, private and governmental intermediaries on a state and federal level are working hard to keep people healthy, keep them out of hospitals and to push people to use outpatient versus inpatient services.

Along with the decline in demographics, and a reduction in the preference for hospital versus outpatient, the hospital industry took a $500 billion “haircut” with the Affordable Care Act.

All of these factors auger a very difficult time ahead for the nation’s in-patient hospitals. This latest closure of North Adams Regional Hospital in Western Massachusetts is, unfortunately, only another example of what has been and will continue to be a major shift in the health care services delivery system.

Marketing, research and business development consultant in healthcare, human services and senior living.

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