Hospital closures due to finances

The Associated Press
Thursday May 10, 2001

SACRAMENTO — In the past five years, 28 California hospitals have closed and mounting financial pressure could cause many more to follow suit, according to a study released Wednesday. 

The study, conducted by University of California, Berkeley researchers, found that most of the hospitals that closed were for-profit hospitals and 65 percent were in Southern California. 

Attorney General Bill Lockyer asked for the study after two hospital closures in Southern California sparked public outcry. Despite all the attention hospital closures received, the report found that public objection was recorded in only seven cases. 

“We found in the study a significant number of closings, and given the seismic upgrade that is mandated, there will be mounting pressure on more hospitals to close,” said Richard Scheffler, one of the researchers from UC Berkeley’s Petris Center on Health Care Markets and Consumer Welfare. 

The study found that the number of closures were accelerating, doubling in the second half of the period. 

Lockyer said though the study found most of the closed facilities were for-profit, that trend “raises concerns for non profit hospitals operations and the potential impact on charity health care.” 

The number of hospital closures between 1995 and 2000 could be as high as 34, said Jan Emerson, spokeswoman for the California Healthcare Association. 

“The reality is California’s health care system is in a financial meltdown,” Emerson said. “Two of every three hospitals in the state are losing money.” 

Scheffler said that California’s hospital closures follow national trends, but he was concerned because the loss of facilities was at a time when the population was growing. 


“There is, on the other hand, some notion that hospitals that close are inefficient, and may need to be pruned from the system, so that other hospitals are more healthy,” he said. 


On the Net: 

Read the report at the attorney general’s Web site: