New analysis underscores the challenges of hospital closures

COVID-19 has accelerated the trend in hospital closures in the U.S., writes Soroush Saghafian. Policymakers face critical choices to prevent further erosion of patient care. 


CAMBRIDGE, MA – In a new commentary published in Health Care Management Science, Soroush Saghafian, Associate Professor of Public Policy at Harvard University, along with his former Ph.D. student Lina Song from the University College London School of Management and Dr. Ali Raja from Massachusetts General Hospital, examine the trend of hospital closures in the U.S. The trio lay out a series of recommendations for policymakers to mitigate the challenges that these closures pose for patients and the healthcare system at large. Saghafian, a faculty affiliate of the Harvard Ph.D. Program in Health Policy, the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School, the Harvard’s Center for Health Decision Science,  and the Harvard’s Data Science Initiative, regularly collaborates with hospitals to improve their operational efficiency, patient flow, medical decision-making, and more broadly, healthcare delivery policies. 

Between 2010 and 2015, an average of 21 hospitals closed annually in the U.S., with 47 shutting their doors in 2019 alone. “The trend of closures has accelerated as hospitals have experienced financial hardship during the COVID-19 pandemic, and it is likely that even more hospitals will close in the near future,” the authors write. Federal support for hospitals in challenging circumstances, such as the Critical Access Hospital (CAH) program designed to cover high fixed costs faced by rural hospitals and Disproportionate Share Hospital (DSH) payments that supplement the cost of uncompensated care have been uneven, with successive attempts to cut DSH funds and make the CAH program’s eligibility stricter. Policymakers should also take into consideration the broader community impacts of hospital closures and note that “when a rural hospital is an area’s only provider, any gains from closure will likely be far outweighed by the adverse impacts of closure on the community.” Further, when a hospital closes, neighboring hospitals will be impacted by increased demand, which can affect the way they deliver patient care. As the author’s analyses show, the remaining hospitals often speed up the delivery of care in order to accommodate the increased number of patients, resulting in serious adverse outcomes. 

Saghafian and his co-authors urge policymakers to monitor the speed-up behavior of remaining hospitals, and also adopt a pay-for-performance mechanism to deter attempts to rush patient care when a neighboring hospital closes. They also urge the federal government to evaluate alternative methods for distributing Coronavirus Aid, Relief, and Economic Security (CARES) Act and other federal relief funds for struggling hospitals: “how they are allocated and used will serve a critical role in determining the future operating status of many hospitals and the care of many patients.”

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