Department  of Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
HOSPITAL  CLOSURE:  1993  OFFICE  OF INSPECTOR  GENERAL 
The mission of the Office of Inspector General (OIG),  as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health  and Human Services (HHS) 
programs as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations,  and 
inspections  conducted by three OIG operating components:  the Office of Audit Services, the 
Office of Investigations, and the Office of Evaluation and Inspections.  The OIG also informs 
the Secretary of HHS of program and management problems and recommends courses to 
correct them. 
OFFICE  OF AUDIT  SERVICES 
The OIGS  Office of Audit Services (OAS)  provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing  audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors in 
carrying out their respective responsibilities and are intended  to provide independent 
assessments of HHS programs and operations in order to reduce waste, abuse, and 
mismanagement and to promote economy and efficiency throughout the Department. 
OFFICE  OF INVESTIGATIONS 
The OIGS  Office of Investigations  (01)  conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries  and of 
unjust enrichment by providers.  The investigative efforts of 01  lead to criminal convictions, 
administrative sanctions, or civil money penalties.  The 01  also oversees  State Medicaid fraud 
control units which investigate and prosecute fraud and patient abuse in the Medicaid program. 
OFFICE  OF EVALUATION  AND  INSPECTIONS 
The OIGS Office of Evaluation and Inspections  (OEI)  conducts short-term management and 
program evaluations  (called inspections)  that focus on issues of concern to the Department, 
the Congress, and the public.  The findings and recommendations contained  in these inspection 
reports generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, 
and effectiveness  of departmental programs. 
OEIS Atlanta Regional  Office prepared this report under the direction of Jesse J. Flowers, 
Regional  Inspector General and Christopher Koehler, Deputy Regional  Inspector General. 
Principal OEI staff included: 
ATLANTA OFFICE  HEADQUARTERS 
Ron Kalil, Project Leader  Winnie Walker

Paula Bowker  Linda Moscoe

Peggy Daniel

Betty Apt

Jackie Andrews

Joe Townsel

For additional copies of this report, please call the Atlanta Regional  Office at (404)-331-410S.
 Department  of Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
HOSPITAL  CLOSURE:  1993

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OEI-04-94-00120  EXECUTIVE  SUMMARY

PURPOSE 
To  describe  the  extent,  characteristics,  reasons  for,  and  impact  of hospital  closure  in 
1993. 
BACKGROUND 
The  closure  of hospitals  in recent  years  has generated  public  and  congressional  concern. 
According  to  a number  of studies,  more  hospitals  are  expected  to close  in coming  years. 
Questions  have  been  raised  about  the  phenomenon  of hospital  closure,  as well as the 
implications  for public  policy. 
We  released  a report  in May  1989 describing  the  nationwide  phenomenon  of hospital 
closure  in 1987.  We  continued  analysis  of hospital  closure  to determine  trends  and 
effects  of the  phenomenon.  We issued  subsequent  reports  on hospital  closure  in 1988, 
1989, 1990, 1991 and  1992. 
The  findings  from  the  previous  OIG  annual  studies  were  similar.  The  hospitals  that 
closed  were  small  and  had  low occupancy  rates.  When  the  hospitals  closed,  few patients 
were  affected.  Most  could  get medical  care  nearby. 
FINDINGS 
Our  inspection  of hospital  closure  in 1993 produced  findings  similar  to those  previously 
reported  for  1987-1992. 
	 Forty-two  general,  acute  care  hospitals  closed,  continuing  a downward  trend  in the 
annual  number  of closures.  They were  located  in 26 States.  Eight  new general, 
acute  care  hospitals  opened  in 1993, and  five hospitals  that  closed  prior  to  1993 
reopened  in 1993. 
  Twenty-two  of the  closed  hospitals  were  rural  and  20 were  urban. 
F	 Closed  hospitals  in both  rural  and  urban  areas  were  much  smaller  than  the 
national  averages. 
Rural  hospitals  that  closed  had  an average  size of 31 beds  compared  to an 
average  of 78 beds  for  all rural  hospitals  nationally. 
Urban  hospitals  that  closed  had  an average  size of 75 beds  compared  to  an 
average  of 261 beds  for all urban  hospitals  nationally. 
i  	 Occupancy  rates  for closed  rural  and  urban  hospitals  were  lower  than  the  national 
averages. 
Rural  hospitals  that  closed  had  an average  occupancy  rateof  18 percent 
compared  toan  average  of35  percent  for all rural  hospitals  nationally. 
Urban  hospitals  that  closed  had  an average  occupancy  rateof  29 percent 
comparedto  an average  of54  percent  for  all urban  hospitals  nationally. 
	 For  rural  hospitals  that  closed,  the  average  daily census  in the  year  priorto 
closure  was six patients.  The  urban  hospitals  that  closed  had  an  average  daily 
census  of22  patients. 
	 Medicare  utilization  among  rural  and  urban  hospitals  that  closed  was slightly 
higher  than  national  averages. 
In rural  areas,  the  average  Medicare  utilization  among  hospitals  that  closed 
was 60.4 percent  compared  to an average  of 54.8 percent  for all rural 
hospitals  nationally. 
In urban  areas,  the  average  Medicare  utilization  among  hospitals  that 
closed  was 51.4 percent  compared  to an average  of 47.1 percent  for all 
urban  hospitals  nationally. 
Medicaid  utilization  among  rural  and  urban  hospitals  that  closed  also differed 
E(cid:1)
from  national  averages. 
In rural  areas,  the  average  Medicaid  utilization  among  hospitals  that  closed 
was lower  than  the  rural  national  average  (7.5 percent  vs. 12.7 percent). 
In urban  areas,  the  average  Medicaid  utilization  among  hospitals  that 
closed  was slightly higher  than  the  urban  national  average  (14.8 percent  vs. 
13.6 percent). 
	 Although  residents  in a few communities  had  to travel  greater  distances  for 
hospital  care,  all but  eight  had  emergency  and  inpatient  medical  care  available 
within  20 miles  of a closed  hospital. 
	 At the  time  of our  inspection,  29 of the  42 closed  hospital  facilities  (69 percent) 
were  being  used  for health-related  services.  Also, plans  were  being  made  for 
using  6 of the  remaining  14 vacant  hospitals  for health-related  services. 
ii  TABLE  OF  CONTENTS 
EXECUTIVE  SUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..o.i	
INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...1	
FINDINGS 
Extent  and  Characteristics  of Closed  Hospitals  . . . . . . . . . . . . . . . . . . . . . . . .  3

How  Many  Closed  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...3

Where  Were  They  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...4

What  Were  They  Like  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...4

Reasons  for  Closure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...7

Impact  ofHospital  Closure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...8

How  Many  Patients  Were  Affected  . . . . . . . . . . . . . . . . . . . . . . . . . . ..8

Are  Inpatient  Care  and  Emergency

Services  Available  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...9

What  Is the  Building  Used  For  Now  . . . . . . . . . . . . . . . . . . . . . . . . . .11

ENDNOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

APPENDIXES 
Methodology  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..A-l 
Number  of Hospital  Closuresby  State  . . . . . . . . . . . . . . . . . . . . . . . . . . . ..B-1

Hospital  Closures  byHospital  Name  and  Location  . . . . . . . . . . . . . . . . . . . .  C-1
 INTRODUCTION 
PURPOSE

To  describe  the  extent,  characteristics,  reasons  for, and  impact  of hospital  closure  in

1993.

BACKGROUND

In the  past  several  years,  the  closure  of general,  acute  care  hospitals  has generated  public

and  congressional  concern.  According  to a number  of studies,  more  hospitals  are

expected  to close in coming  years.  Questions  have  been  raised  about  the  phenomenon  of

hospital  closure  in the  United  States,  as well as implications  for public  policy.

We  released  a report  in May  1989 describing  the  extent,  characteristics  and  impact  of

hospital  closure  in the  United  States  in 1987.  That  inspection  showed  that  69 hospitals

closed  in  1987.  Following  that  inspection,  many  health  policy officials in both  the

executive  and  legislative  branches  of the  Federal  government  encouraged  us to continue

analysis  of the  phenomenon.  They  expressed  interest  in detecting  differences  in the

(1) rate  of hospital  closure,  (2) characteristics  of hospitals  that  close,  and  (3) impact  of

their  closing.

Similar  inspections  of the  phenomenon  of hospital  closure  in 1988 through  1992 showed

a downward  trend  in the  number  of closures.

HOSPITAL  CLOSURE 
#  of  CIosure9 
1oo-
88 
80- 76 
69 
66  67 
60 
1Q87  19aa  1989  1990  1991  1992 
YEAR 
1
 The  findings  from  the  1987 through  1992 inspections  were  similar.  The  hospitals  that 
closed  were  small  and  had  low occupancy  rates.  When  the  hospitals  closed,  few patients 
were  affected.  Most  could  get medical  care  nearby. 
SCOPE 
We  examined  hospitals  that  closed  in calendar  year  1993. 
For  purposes  of this study, the  following  definitions  were  used. 
Hospital:  A facility that  provides  general,  short-term,  acute  medical  and  surgical 
inpatient  semices. 
Closed  Hospital:  One  that  stopped  providing  general,  short-term,  acute  inpatient 
semices  in 1993.  If a hospital  merged  with  or was sold to another  hospital  and  the 
physical  plant  closed  for inpatient  acute  care,  it was considered  a closure.  If a hospital 
both  closed  and  reopened  in 1993, it was not  considered  a closure. 
METHODOLOGY 
To  determine  the  extent,  reasons  for, and  impact  of hospital  closure,  we obtained 
information  from  State  licensing  and  certification  agencies,  State  health  planning 
agencies,  State  hospital  associations,  HCFA  data  bases,  officials  associated  with  closed 
and  nearby  hospitals,  and  local  public  officials. 
We  obtained  information  on the  characteristics  of all hospitals  and  those  that  closed  in 
1993 from  the  Hospital  Cost  Report  Information  System  (HCRIS)  maintained  by HCFA. 
Appendix  A describes  our  methodology  in further  detail. 
We  conducted  our  review  in accordance  with the  Quali~  Standards for Inspections issued 
by the  Presidents  Council  on Integrity  and  Efficiency. 
2
 FINDINGS

The  Inspector  Generals  study ofhospitals  closedin  1993 showed  that: 
 Forty-two  general,  acute  care  hospitals  closedin  1993, continuing  a downward 
trend  in the  annual  number  of closures. 
  Most  hospitals  that  closed  were  small  and  had  low occupancy  rates. 
When  a hospital  closed,  few patients  were  affected. 
F 
 Although  residents  of a few communities  had  to travel  greater  distances  for 
hospital  care,  all but  eight  had  emergency  and  inpatient  medical  care  available 
within  20 miles  of a closed  hospital. 
While  42hospitals  closedin  1993,8new  general,  acute  care  hospitals  opened,  adding  579 
beds  to the  national  supply  of beds.  In addition  to the  new openings  during  1993, 5 
hospitals  that  closed  prior  to  1993 reopened  in 1993, adding  another  150 beds. 
EXTENT  AND  CHARAC1ERISTICS  OF  CLOSED  HOSPITALS 
How Many  Closed 
In  1993, there  were  4,927 general,  short-term,  acute  care  hospitals  inthe  United  States 
entered  on HCFAS data  base  as participating  in the  Medicare  program.  Forty-two 
hospitals  closedin  1993 -- 0.85 percent  ofall  hospitals  nationally.  Eight  fewer  hospitals 
closed  in  1993 than  in the  previous  year. 
When  they  closed,  the  general,  acute  care  inpatient  bed  supply was reduced  by 2,192 
beds,  or 0.3 percent. 
3(cid:1) Where Were They 
The  closed  hospitals  were  located  in 26 States.  Texas  had  the  greatest  number  of 
closures  (6), followed  by Minnesota  (3) and  Oklahoma  (3).  Seven  States  had  2 closures 
each  and  the  remaining  16 States  had  1 closure  each.  Appendix  B lists the  number  of 
hospital  closures  by State.  Appendix  C lists the  closures  by hospital  name  and  location. 
About  the  same  percentage  of rural  hospitals  (0.9 percent)  and  urban  hospitals 
(0.8 percent)  closed  in 1993. 
What Wwe the Chsed  Hospitak  Like 
~:  Hospitals  that  closed  in 1993 were  small.  More  than  half the  hospitals  that  closed 
(52 percent)  had  fewer  than  50 beds. 
I  Number  of Closed  Hospitals  I 
I  I 
Number  of Beds  Rural  Urban  Total  Percent 
O-29  13 
30-49  5 
50-99  4 
100-199  0  6  6 14 
200-299  0  0  0 0 
300>  0  0  0 0 
TOTALS  22  20  42 100 
4
 Both  the  rural  and  urban  hospitals  that  closed  in 1993 were  considerably  smaller  than  the 
average  size of rural  and  urban  general,  acute  care  hospitals  nationally. 
HOSPITALS  THAT  CLOSED 
WERE  SMALL 
#  of  Beds 
Soo   
260   
200   
160 
loo 
60   
o 
RURAL  HOSPITALS  URBAN  HOSPITALS 
_  National  Avg  - Cioseci  Hospital  A.g 
Occupancy  rates  for closed  rural  and  urban  hospitals  were  considerably 
&CUDaIl  cw 
lower  than  the  national  averages.1 
OCCUPANCY  RATES  WERE  LOW 
60%   
54.2% 
60%   
40%    3s.4% 
so%   
20%   
lo% 
0%   
RURAL.  HOSPiTALS  URBAN  HOSPITALS 
_  Nationai  Avg  - Ciosecl  Hospitai  Avg 
5(cid:1) Medicare  Utilization:  In both  mraland  urban  areas,  theaverage  Medicare  utilization 
among  hospitals  that  closed  was slightly higher  than  the  national  averages.2 
MEDICARE  UTILIZATION 
70%   
60.4% 
60%   
60%   
40%   
30%   
20%   
10%   
o%   
RURAL  HOSPITALS  URBAN  HOSPITALS 
_  National  Avg  =  Closed  HosDital  Avg 
Medicaid  Utilization:  In rural  areas,  the  average  Medicaid  utilization  among  hospitals 
that  closed  was lower  than  the  rural  national  average  (7.5 percent  vs. 12.7 percent).  In 
urban  areas,  the  average  Medicaid  utilization  among  hospitals  that  closed  was slightly 
higher  than  the  urban  national  average  (14.8 percent  vs. 13.6 percent)$ 
MEDICAID  UTILIZATION 
20% 
1e% 
16% 
1 4%  12.7% 
1 2% 
1 o% 
e% 
6% 
4% 
2% 
o% 
RURAL  HOSPITALS  URBAN  HOSPITALS 
_  National  Avg  =  Closed  Hospital  Avg 
6(cid:1) REASONS  FOR  CLOSURE 
As in our  previous  hospital  closure  studies,  the  many  health  care  professionals 
interviewed  reported  no single reason  for hospital  closure.  Hospitals  closed  because  of 
the  interrelated  factors  of declining  occupancy,  lagging revenues,  and  rising costs. 
Hospital  viability was said to depend  on the  stability  of all three  factors.  The  weakening 
of one  may begin  a chain  reaction  eventually  leading  to hospital  closure. 
Declining 
r 
Occupancy 
Rising 
costs 
* 
L	
Declining 
Revenues 
Although  the  sequence  and  combination  of these  factors  were  not  always the  same, 
generally  the  scenario  was as follows: 
The  hospitals  occupancy  begins  to slide because  a doctor  leaves  town  or retires,  or 
begins  to admit  patients  to a more  modern  hospital  not  far  away.  Lengths  of stay are 
down because  of prospective  payment  pressures  and  more  effective  treatment  methods. 
A new ambulatory  surgical  center  has  opened  and  is also drawing  patients  away. 
While  occupancy  is declining,  the  hospitals  costs continue  to rise.  Competition  with 
other  hospitals  means  that  new, high technology  equipment  is needed.  Nurses  and 
technicians  are  demanding  higher  salaries  - and  they  are  getting  them  from  other 
hospitals  nearby.  The  building  may be  deteriorating  but  the  hospital  hasnt  been  able  to 
fully fund  its capital  reserves  for several  years. 
On  the  other  hand,  patient  care  revenue is down because  of lower  occupancy  and  more 
uninsured  or inadequately  insured  patients.  For  those  who do have  coverage,  either 
7  public  or private,  insurers  are  holding  down  their  costs and  further  eroding  the  hospitals 
dwindling  resources. 
Soon  the  hospital  administrator  is unable  to manage  the  situation,  and  the  Board 
examines  its options:  continue  to go deeper  into  debt;  sell the  hospital;  merge  with 
another;  or close. 
The  smaller  the  hospital,  the  less able  it is to resist  this downward  spiral.  As noted 
earlier,  the  average  size of the  42 hospitals  that  closed  in 1993 was only 31 beds  for rural 
hospitals  and  75 beds  for urban  hospitals.  They  are  considerably  smaller  than  the 
national  averages. 
IMPACT  OF  HOSPITAL  CLOSURE

In communities  where  hospitals  closed  in 1993, we assessed  the

F  number  of patients  affected  by closure  of hospitals,

E  availability  of inpatient  care  and  emergency  medical  services,  and

  current  use of a closed  hospital  facility.

How Many Patienfi  Were Affected 
For  rural  hospitals  that  closed  in 1993, the  average  daily census  in the  year  prior  to 
closure  was about  six patients.  The  urban  hospitals  that  closed  had  an average  daily 
census  of 22 patients. 
Rural  Hospitals  Urban  Hospitals 
Average  Number  of Beds  31.0  75.5 
Average  Occupancy  Rate  X 18.0%  X 29.2$Z0 
Average  Number  of Patients  5.6  22.0 
We  analyzed  Medicare  utilization  data  to determine  the  number  of elderly  patients 
affected  by hospital  closure  in 1993.  In rural  hospitals  that  closed,  about  three  Medicare 
patients  were  in the  hospital  on an average  day in the  year  prior  to closure.  In the  urban 
hospitals  that  closed,  there  were  about  11 Medicare  patients  on an average  day. 
8(cid:1) Rural  Hospitals  Urban  Hospitals 
Average  Patient  Census  5.6  22.0 
Average  Medicare  Utilization  Rate  X 60.4%  x 51.470 
Average  Number  Medicare  Patients  3.4  11.3 
Are Inpatient  Care and Emqency  Sew-cm Available 
We  assessed  availability  of inpatient  and  emergency  medical  care  in miles  from  the 
closed  hospitals  to the  nearest  inpatient  and  emergency  facilities. 
Irmatient  Care:  In most  communities  where  a hospital  closed  in 1993, inpatient  hospital 
NUMBER  OF  CLOSED 
HOSPITALS 
DISTANCE
 Rural  Urban 
Within  3 Miles
 o (o%)  13 (65%) 
4-10 Miles
 1 (5%)  6 (30%) 
11-20 Miles
 13 (59%)  1 (5%) 
21-30 Miles
 6 (27%)  o (o%) 
More  than  30 Miles
 2 (9%)  o (o%) 
Totals  22 (loo%)  20 (loo%) 
Rural Areas:  Residents  in 14 of the  22 rural  communities  (64 percent)  where  a hospital 
closed  could  get inpatient  hospital  care  within  20 miles  of the  closed  hospital. 
Residents  of 2 rural  communities  had  to travel  more  than  30 miles  for inpatient  hospital 
care: 
Rogers  City, Michigan  35 miles 
Mohall,  North  Dakota  35 miles 
9
 Urban Areas:  In all but  1 of the  20 urban  communities  where  a hospital  closed  in 1993, 
residents  could  get inpatient  hospital  care  within  10 miles  of the  closed  hospital. 
Residents  of Durdap,  Tennesse  must  travel  18 miles  to Whitwell  for inpatient  care. 
Fourteen  of the  20 urban  communities  (70 percent)  where  a hospital  closed  could  get 
inpatient  care  in the  same  town. 
Emer~encv  Services:  When  a hospital  closed,  the  community  lost not  only inpatient  beds, 
but  also 24-hour  emergency  services. 
Rural Areas:  For  residents  in 15 of 22 rural  communities  (68 percent)  where  hospitals 
closed  in 1993, emergency  care  facilities  were  available  within  20 miles  of the  closed 
hospitals.  Residents  of 1 community  must  travel  more  than  30 miles for  24-hour 
emergency  care.  In Rogers  City, Michigan  the  nearest  emergency  care  is located  35 
miles  away in Alpena.  Rogers  City does  have  physicians  located  there,  however. 
Urban Areas:  In  19 of 20 urban  communities  (95 percent)  where  a hospital  closed  in 
1993, emergency  care  facilities  were  available  within  10 miles  of the  closed  hospital.  The 
remaining  community,  Dunlap,  Tennessee,  is within  18 miles  of an emergency  care 
facility.  Dunlap  has  physicians  located  in the  community. 
I  NUMBER  OF  CLOSED 
HOSPITALS 
DISTANCE
 I  Rural  I  Urban 
I 
Within  3 Miles
 I  3 (14%)  13 (65%) 
4-10 Miles
 I	 1 (4.5%)  I  6 (30%) 
11-20 Miles
 11 (50%)  1 (5%) 
21-30 Miles
 I	 6 (27%)  I  o (o%) 
More  than  30 Miles
 1 (4.5%)  o (o%) 
Totals  22 (loo%)  20 (loo%) 
10
 What b  the Buiiiiing Used For Now 
At the  time  of our  review,  29 of the  42 closed  hospital  buildings  (69 percent)  were  being 
used  for health-related  services.  For  example: 
 Choctaw  Hospital  in Butler,  Alabama  and  Eveleth  Hospital  in Eveleth,  Minnesota 
became  nursing  homes. 
 Indian  Health  Medical  Center  in Frederic,  Wisconsin  is now a drug  rehabilitation 
and  counseling  clinic. 
F	 Clintonville  Community  Hospital  in Clintonville,  Wisconsin  became  a Rural  Health 
Clinic. 
 Union  City Memorial  Hospital  in Union  City, Indiana  and  Oswego  City Hospital 
in Oswego,  Kansas  were  converted  to outpatient  clinics. 
one  notable  initiative  of community  involvement  when  a hospital  closes  took  place  when 
the  Central  Medical  Center  Hospital  in St. Louis,  Missouri  became  the  Penrose  Family 
Support  Center.  This  is a community-based  family resource  center  that  provides 
integrated  services  to  families  in one  convenient  location.  The  Hospital  Association  of 
Metropolitan  St. Louis  purchased  the  closed  hospital  facility and  donated  the  building  to 
the  Missouri  Department  of Social Services. 
At the  time  of our  review  the  Penrose  Center  had  19 service  agencies  housed  in the 
closed  hospital  facility.  Some  of the  services  provided  are  primary  health  care, 
drug/alcohol  rehabilitation,  outpatient  day treatment,  crisis overnight  care,  nutritional 
programs  for mothers  with children  under  school  age,  training  and  employment  for 
AFDC  clients  and  other  area  residents,  in-home  semices  to assist  elderly  residents, 
coordination  of a variety  of city youth  programs,  family treatment  services  for abused  and 
neglected  children,  and  a mentoring  program  including  those  in foster  care. 
Some  of the  future  Penrose  occupants  include  agencies  that  will provide  dialysis 
treatment,  breast  and  cervical  cancer  screening  survey, respite  care  for parents  of 
children,  child  support  enforcement  services,  housing  referrals,  legal  assistance  for 
community  residents,  case  management  services  to families  with mental  health  problems, 
on-site  child care  center,  and  a congregate  activity center  for the  elderly. 
11
 The  following  chart  illustrates  the  use  of all 42 hospital  facilities  after  closure  in 1993. 
I  I 
USE  OF  BUILDING  Rural  Urban 
Specialty  Treatment  Facility 
(e.g. chemical  dependency)  3  3 
Reopened  Hospital  I  o  I  1 
Long  Term  Care  Facility  4  1 
Outpatient  Services/Clinic  I  13  I  6 
Offices  I  5  13 
Vacant  I  4  19 
*Duplicate  count:  In 9 of the  42 former  hospitals  more  than  1 service  is now offered. 
At the  time  of our  review,  plans  were  being  made  to use 6 of the  remaining  14 vacant 
hospitals  for health-related  services.  For  example,  Sequatchie  General  Hospital  in 
Dunlap,  Tennessee  and  Dickey  County  Memorial  Hospital  in Ellendale,  North  Dakota 
will be  converted  to an assisted  elderly  living facility.  Also, plans  were  being  made  for 
three  of the  closed  facilities  to reopen  as acute  care  hospitals. 
12
 ENDNOTES

1.	 Hospital  occupancy  rate  is defined  as the  actual  number  of patient  days divided  by 
the  total  bed  days available.  National  occupancy  rate  is defined  as the  sum of all 
hospitals  occupancy  rates,  divided  by the  number  of hospitals. 
2.	 Average  Medicare  utilization  of closed  rural  and  urban  hospitals  is defined  as the 
percent  of Medicare  patient  days compared  to the  total  patient  days for each 
hospital,  summed  anddivided  bythenumber  of hospitals.  National  average 
Medicare  utilization  is the  percent  of Medicare  utilization  of each  hospital, 
summed  and  divided  by the  total  number  of hospitals. 
3.  Medicaid  utilization  is calculated  in the  same  way as Medicare  utilization. 
13
 APPENDIX  A

METHODOIXIGY 
Extent of Hospital  Closure 
Todetermine  howmany  hospitals  closedin  1993, resurveyed  State  licensing  and 
certification  agencies,  State  hospital  associations  and  State  health  planning  agencies.  We 
also compiled  Health  Care  Financing  Administration  (HCFA)  data  on terminated 
providers  in 1993,  When  a closed  hospital  met  the  studys definition  or when  there  were 
questions,  we contacted  officials  associated  with the  closed  hospitals,  officials  associated 
with hospitals  nearest  to the  closed  hospital,  and  local  public  officials. 
To  determine  the  number  of hospitals  in the  United  States,  we used  the  Hospital  Cost 
Report  Information  System  (HCRIS)  maintained  by HCFA.  We  included  only general, 
short-term,  acute  care  hospitals  under  Medicares  Prospective  Payment  System  (PPS)  in 
the  universe.  There  were  4,927 hospitals  listed  on HCRIS  as short-term,  acute  care, 
general  hospitals  for the  ninth  year  of PPS (PPS  9). 
Character&tics of Hospital  Closure 
To  analyze  characteristics  of closed  hospitals,  we used  HCRIS  data.  Cost  reports  were 
not  available  for  1 of the  42 closed  hospitals.  For  the  remaining  41 hospitals,  we used 
the  latest  pre-closure  cost reports.  For  example,  if a hospital  closed  in May  1992 and  its 
accounting  year  was on a January-December  cycle, we used  the  providers  January  1, 
1992 to December  31, 1992 report. 
Reasons for Hospital  Closure 
We  contacted  officials  of the  following  organizations  to determine  the  reasons  for  1993 
hospital  closure: 
F  State  hospital  associations 
E  State  health  planning  agencies 
  State  certification  and  licensing  agencies 
Closed  hospitals 
F 
E  Nearby  hospitals  to closed  hospitals 
F  Local  ambulance  companies 
A -1
 Impct  of Hospital  Closure 
We  limited  our  impact  analysis to the  distance  from  a closed  hospital  to the  nearest 
still-operating  hospitals  and  to emergency  services.  We  obtained  data  for  our  analysis 
from  interviews  with the  following  sources. 
*  Former  hospital  administrators,  board  members,  and/or  staff  of closed  hospitals

  Hospital  administrators  and/or  staff  at the  nearest  hospitals

k  Local  police  and  health  officials

Local  government  officials

b 
  State  health  planning  agencies

>  State  certification  and  licensing  agencies

F  State  hospital  associations

A -2
 APPENDIX  B

II 1  I 
Oklahoma  3  2  1 
Alabama  2  2  0 
California  2  1  1 
Michigan  2  1  1 
Missouri  2  0  2 
Mississippi  2  2  0 
North  Dakota  2  2  0 
Wisconsin  2  2  0 
Colorado  1  1  0 
Connecticut  1  0  1 
Florida  1  0  1 
Illinois  1  1  0 
Indiana  1  1  0 
II	 II  } 1 
Kansas  1  1 0 
Louisiana  1  1 0 
Massachusetts  1  0 1 
Maryland  1  0 1 
New Mexico  1  0 1 
Pennsylvania  1  0 1 
Rhode  Island  1  0 1 
Tennessee  1  0 1 
Washington  1  0 1 
West  Virginia  1  0 1 
Wyoming  1  1 0 
26 States  42 Closures  22 Rural  20 Urban 
B-1
 APPENDIX  C

1993 HOSPITAL  CLOSURES  BY NAME  AND  LOCATION 
Rural/ 
Hospital  Name  City
 State  Urban 
Choctaw  Hospital  Shoals  Community  Hospital  Butler
 AL  rural 
D.E.  Jackson  Memorial  Hospital  Lester
 AL  rural 
Beverly  Hills Medical  Center  Los Angeles
 CA  urban 
West  Side  Community  Hospital  District  Newman
 CA  rural 
St. Joseph  Hospital  Del  Norte  co  rural 
Park  City Hospital  Bridgeport  CT  urban 
Doctors  Hospital  of Tampa  Tampa  FL  urban 
Savanna  City Hospital  Savanna  IL  rural 
Union  City Memorial  Hospital  Union  City  IN  rural 
Oswego City Hospital  Oswego  Ks  rural 
Bienville  General  Hospital  Arcadia  LA  rural 
Amesbury  Hospital  Amesbury  urban 
Leland  Memorial  Hospital  Riverdale  MD  urban 
Huron  Shores  Health  Center  Rogers  City  MI  rural 
North  Detroit  General  Hospital  Detroit  MI  urban 
Pelican  Valley Hospital  Pelican  Rapids  rural 
Eveleth  Hospital  Eveleth  MN  urban 
Comfrey  Hospital  Comfrey  MN  rural 
Deaconess  Hospital-North  Normandy  MO  urban 
Central  Medical  Center  Hospital  St. Louis  MO  urban 
Rush  Hospital-Newton  Newton  MS  rural 
Fulton  Hospital  Fulton  MS  rural 
Renville-Bottineau  Hospital  Mohall  ND  rural 
Dickey  County  Memorial  Hospital  Ellendale  ND  rural 
Presbyterian  Northside  Hospital  Albuquerque  NM  urban 
Okarche  Memorial  Hospital  Okarche  OK  rural 
Alfalfa  County  Hospital  Cherokee  OK  rural 
Southwwst  Medical  Center  Moore  OK  urban 
Cooper  Hospital  Philadelphia  PA  urban 
Cranston  General  Hospital  Cranston  RI  urban 
Sequatchie  General  Hospital  Dunlap  TN  urban 
Lockhart  Hospital  Lockhart  TX  rural 
Valley Community  Hospital  El Paso  TX  urban 
Lee Memorial  Hospital  Giddings  TX  rural 
c-1 
...  _  1993HOSPITAL  CLOSURES  BY NAME  AND  LOCATION  (continued) 
Rural/ 
Hospital  Name  City  State  Urban 
Dallas  Memorial  Hospital  Dallas  Tx  urban 
Tri-City  Regional  Hospital  Pasadena  TX  urban 
Southeastern  Methodist  Hospital  Dallas  TX  urban 
St. Lukes  Memorial  Hospital  Spokane  WA  urban 
Clintonville  Community  Hospital  Clintonville  WI  rural 
Indian  Health  Medical  Center  Frederic  WI  rural 
Weirton  Osteopathic  Hospital  Weirton  urban 
South  Big Horn  County  Hospital  Greybull  rural 
c-2