Hospital Closures a ‘Silent Epidemic’

Nearly two dozen hospitals in California closed in the last half of the 1990s--almost half in Los Angeles County--largely because of financial pressures, according to a study released Wednesday.

The closures were attributed to an unforgiving health care climate: a nursing shortage, low payments from health care plans, Medicare funding cuts, too many uninsured patients and financial losses from earthquake retrofitting, according to the study.

“They’re losing money,” said Richard Scheffler, a professor at UC Berkeley who was a lead researcher for the study. “The profit margins were very low. They just couldn’t pay their bills.”

California hospitals have twice as much debt as the national average, Scheffler said.

The study--the first to look at how many hospitals have closed in the state, and why--found that 23 hospitals shut their doors in California between 1995 and 2000. Eleven were in the Los Angeles area and four in the San Diego area.

Because Los Angeles is an urban center with a dense population, it has more hospitals, and therefore more closures, said Jamie Court, a spokesman for the watchdog group Consumers for Quality Care.

Still, with the population growing, the closures are disturbing, he said. The large uninsured population makes things worse, he said.

“Since health insurance premiums are higher, fewer people in Los Angeles County have been able to afford them,” Court said. “This is a silent epidemic.”

According to the study, about half of the hospitals that closed were small, with fewer than 100 beds, and nearly half were for-profit.

“Managed-care firms probably stayed away from smaller hospitals,” Scheffler said. “They just prefer bigger and fewer hospitals to deal with, rather than small hospitals that can’t provide a large range of services.”

Almost half had changed ownership at least once within three years. Most of the closures took place between 1997 and 2000. Hospitals that served more Medi-Cal patients were more likely to close than others.

“We think [closures are] likely to continue,” Scheffler said. ‘It could increase significantly. Hospitals now have to upgrade for earthquakes, and that could cost them hundreds of millions of dollars to do.”

After the 1994 Northridge earthquake, the Legislature passed a law requiring hospitals to meet stiffer seismic standards beginning in 2008. Many hospitals say that, without assistance, they are unable to pay the millions of dollars necessary to rebuild or reinforce medical buildings.

With all of California’s health care problems, the findings come as no surprise, said Jan Emerson, a spokeswoman for the California Health Care Assn., a hospital trade group.

“Is it any wonder that hospitals are closing?” she said. “It is something we are enormously concerned about. We are facing a health care system that is near financial meltdown.”

Her biggest concern is what will happen to patients who don’t have access to quality health care.

“We are going to start seeing hospitals close where they are the only provider in a 25-mile radius, or inner-city hospitals that serve very poor populations,” she said.

“The people in those communities don’t have the resources or the transportation systems to be able to get to the next hospital that is five, six or 10 miles down the street. They may have to get on a bus and travel all day.”

She also worried about the job losses caused by hospital closures.

Scheffler hopes to continue researching the issue by looking into the effects of hospital mergers and closures on communities. He also wants to identify early warning signs that indicate a hospital is at risk of closing.

“I hope that policymakers will have a sense that hospital closures are a significant concern in California, and also in particular areas--L.A. for example,” Scheffler said. “All of the issues . . . need to be looked at.”