Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JANET REHNQUIST 

Inspector General 

May 2003 

OEI 04-02-00611 

Trends in Urban Hospital Closure 

1990-2000 
OFFICE OF INSPECTOR GENERAL

http://www.oig.hhs.gov/ 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as amended 

by Public Law 100-504, 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 the following operating components: 

Office of Audit Services 

The OIG's 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 Evaluation and Inspections 

The OIG's 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 the inspection reports generate rapid, accurate, 

and up-to-date information on the efficiency, vulnerability, and effectiveness of departmental programs. 

Office of Investigations 

The OIG's Office of Investigations (OI) 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 OI lead to criminal convictions, administrative sanctions, or civil 

monetary penalties. The OI also oversees State Medicaid fraud control units which investigate and 

prosecute fraud and patient abuse in the Medicaid program. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, rendering 

advice and opinions on HHS programs and operations and providing all legal support in OIG’s internal 

operations. The OCIG imposes program exclusions and civil monetary penalties on health care providers 

and litigates those actions within the Department. The OCIG also represents OIG in the global settlement 

of cases arising under the Civil False Claims Act, develops and monitors corporate integrity agreements, 

develops model compliance plans, renders advisory opinions on OIG sanctions to the health care 

community, and issues fraud alerts and other industry guidance. 


EXECUTIVE SUMMARY 

OBJECTIVE 

To summarize the extent, characteristics, reasons for, and impact of urban hospital closures 

from calendar years 1990 through 2000. 

BACKGROUND 

Hospital closures have generated concern among the health care industry, government leaders, 

and the general public. Of particular interest were the reasons for and impact of the closures. 

In May 1989, the Office of Inspector General (OIG) released a report describing the 

phenomenon of urban and rural hospital closures within the United States during calendar year 

1987. Many users of that information encouraged us to continue a yearly analysis to determine 

the rate of closure as well as trends in the characteristics and circumstances of hospitals that 

closed. Consequently, we conducted similar annual inspections documenting hospitals that 

closed through calendar year 2000. 

In 1995, the OIG released a report describing trends associated with urban hospitals that 

closed from 1987 through 1993. Our current inspection broadens that information and focuses 

on the extent and characteristics, as well as the reasons for and effects of urban hospitals that 

closed during 1990 through 2000. We are issuing a separate report documenting the unique 

circumstances that led to rural hospital closures, “Trends in Rural Hospital Closure: 1990-

2000" (OEI-04-02-00610). 

To determine the extent, characteristics, reasons for, and impact of urban hospital closures 

during calendar years 1990 through 2000, we reviewed and expanded upon the information 

previously documented in our annual hospital closure reports. For those reports, we compiled 

hospital data from two Centers for Medicare & Medicaid Services (CMS) databases: the 

Hospital Cost Report Information System (HCRIS) and Provider of Service (POS) file. 

Additionally, we interviewed officials associated with each of the closed hospitals as well as 

representatives from state hospital and licensing agencies. 

Trends in Urban Hospital Closure: 1990-2000 i OEI-04-02-00611 
FINDINGS 

Our review of urban hospitals that closed from 1990 through 2000 revealed the following: 

296 urban hospitals closed -- 10.6 percent of all urban hospitals nationally at the 

beginning of the trend period. 

• The average annual rate of closure was 1 percent. 

• Urban bed supply was reduced by 4.8 percent (33,253 of the 686,035 urban beds 

nationally at the beginning of the trend period). 

Generally, urban hospitals that closed were smaller and treated fewer patients than 

urban hospitals nationally. 

• Urban hospitals that closed averaged fewer beds, lower occupancy rates, and lower 

annual net income than urban hospitals nationally. Medicare and Medicaid utilization 

rates, however, were slightly higher among hospitals that closed. 

< Size: 112.3 beds compared to 240.5 beds nationally 

< Occupancy: 35.9 percent compared to 53.4 percent nationally 

< Net income: ($3,221,172) compared to $3,929,219 nationally 

< Medicare utilization: 46.4 percent compared to 45.9 percent nationally 

< Medicaid utilization: 14.6 percent compared to 13.5 percent nationally 

• Urban hospitals that closed were used by about one-third as many patients as urban 

hospitals nationally. Specifically, their average daily census was: 

< Total patients: 40 patients, compared to 128 patients nationally 

< Medicare patients: 19 patients, compared to 59 patients nationally 

< Medicaid patients: 6 patients, compared to 17 patients nationally 

Officials associated with most urban hospitals that closed reported the reasons to be 

competition, business-related decisions, or a low number of patients. 

• From 1998 through 2000, 113 urban hospitals closed. Officials associated with those 

hospitals cited multiple reasons for closure; however, the primary reasons were as 

follows: 

Trends in Urban Hospital Closure: 1990-2000 ii OEI-04-02-00611 
< Competition: Thirty-one (27.4 percent) reported that closure was due to 

competition with other nearby hospitals. 

< Business decisions: Thirty (26.6 percent) reported that the reason for closure 

was based on relocation, consolidation, or merger. 

< Number of patients: Sixteen (14.2 percent) attributed closure to low 

occupancy/low census. 

< Medicare and Medicaid reimbursements: Twelve (10.6 percent) reported 

insufficient Medicare and/or Medicaid reimbursements as reasons for closure; 

however, officials with 11 of those facilities stated that other factors, such as 

competition and low occupancy, also contributed. 

< Other reasons: Twelve (10.6 percent) reported various other reasons, such as 

mismanagement or an outdated facility. 

< Not Specified: Twelve (10.6 percent) did not report a primary reason for 

closure. 

• During 1990-1997, we reported on the reasons for hospital closure in four of our 

annual reports (1990, 1993, 1996, and 1997); however, that information did not 

differentiate between urban and rural closures. During those years, hospitals (urban 

and rural combined) generally closed because of low occupancy, lagging revenues, 

rising costs, or a combination of those factors. 

Hospital services were still available within 10 miles from most of the urban hospitals 

that closed. 

• Most urban residents could receive inpatient and emergency services within 10 miles of 

the closed hospital. 

< Inpatient care: In 268 of the 296 (90.5 percent) urban communities where a 

hospital closed, inpatient care was available within 10 miles from the closed 

facility. Furthermore, residents in 290 (98.0 percent) of those communities 

could get inpatient care within 20 miles from the closed facility. 

< Emergency care: In 274 of the 296 (92.6 percent) urban communities where a 

hospital closed, emergency care was available within 10 miles of the closed 

facility. Residents in 293 (99.0 percent) of those communities could get 

emergency care within 20 miles from the closed facility. 

• During 1998-2000, 37 urban hospitals either opened or reopened, reducing the 

national impact of the 113 urban hospitals that closed during those 3 years. 

Additionally, 64 hospitals (urban and rural) opened or reopened from 1990 through 

1997. Prior to 1998, however, we did not identify such data specific to rural or urban 

classifications. Therefore, we cannot identify how many of the 64 openings were in 

urban communities. 

Trends in Urban Hospital Closure: 1990-2000 iii OEI-04-02-00611 
TABLE OF CONTENTS 

PAGE

EXECUTIVE SUMMARY ...................................................... i

INTRODUCTION ............................................................. 2

FINDINGS 

Extent and Characteristics of Urban Hospitals That Closed ......................... 5

Number of urban hospitals that closed ................................... 5

Characteristics of urban hospitals that closed ............................... 6

Reasons for Urban Hospital Closure .......................................... 10

Impact of Urban Hospital Closure ........................................... 11

Distance to inpatient and emergency care ................................ 11

Impact of hospital openings .......................................... 13

APPENDICES 

A: Urban Hospital Closures by State ......................................... 14

B: Medicare and Medicaid Utilization ......................................... 16

ACKNOWLEDGMENTS ..................................................... 18

Trends in Urban Hospital Closure: 1990-2000 1 OEI-04-02-00611 
INTRODUCTION 

OBJECTIVE 

To summarize the extent, characteristics, reasons for, and impact of urban hospital closures 

from calendar years 1990 through 2000. 

BACKGROUND 

Hospital closures have generated concern among the health care industry, government leaders, 

and the general public. Of particular interest were the reasons for and impact of the closures. 

In May 1989, the Office of Inspector General (OIG) released a report describing the 

phenomenon of urban and rural hospital closures within the United States during calendar year 

1987. Many users of that information encouraged us to continue a yearly analysis to determine 

the rate of closure as well as trends in the characteristics and circumstances of hospitals that 

closed. Consequently, we conducted similar annual inspections documenting hospitals that 

closed through calendar year 2000. 

In 1995, the OIG released a report that addressed trends associated with urban hospitals that 

closed during 1987-1993, “Trends in Urban Hospital Closure: 1987-1993" (OEI-04-95-

00050). Our current inspection broadens that information and reports on the issue of urban 

hospital closures during 1990-2000. We are issuing a separate report documenting the unique 

circumstances that led to rural hospital closures, “Trends in Rural Hospital Closure: 1990-

2000" (OEI-04-02-00610). 

METHODOLOGY 

To determine the extent, characteristics, reasons for, and impact of urban hospital closures 

during 1990-2000, we reviewed and expanded upon the information previously documented in 

our annual hospital closure reports. For those reports, we compiled hospital data from two 

Centers for Medicare & Medicaid Services (CMS) databases: the Hospital Cost Report 

Information System (HCRIS) and Provider of Service (POS) file. For each hospital that 

closed, we obtained cost report data accounting for the most recent full fiscal year prior to 

closure. Additionally, we interviewed officials associated with each of the closed hospitals as 

well as representatives from state hospital and licensing agencies. 

Trends in Urban Hospital Closure: 1990-2000 2 OEI-04-02-00611 
We compiled data for hospitals that closed during the entire 11-year trend period -- including 

average number of beds, average occupancy, Medicare and Medicaid utilization, and the 

average number of patients affected -- by calculating weighted averages using the data we 

collected from our previous hospital closure reports. Due to rounding, some minor variation 

may exist between the data in this report when compared to the data in our annual hospital 

closure reports. Additionally, we compiled net income data directly from HCRIS. 

To supplement the data, we contacted state licensing and certification agencies, state hospital 

associations, and state health planning agencies. Further, we surveyed various officials that 

were directly or indirectly associated with each hospital. Such officials included: 

< Former hospital executives and physicians of the closed urban facilities, 

< Executives from nearby hospitals, 

< Local health and government officials, and 

< Officials associated with parent corporations of closed hospitals. 

We determined the distance from closed urban hospitals to the closest operating hospitals and 

emergency services using maps and mapping programs (e.g., Mapquest) in addition to the 

information provided by the various officials we interviewed. 

We used data sets previously developed for our annual hospital closure reports to quantify 

urban hospitals that opened from 1998 through 2000. Prior to 1998, we did not identify such 

data specific to rural or urban classifications. The reported data was an aggregated total of 

openings and reopenings. 

We used the following definitions as we examined urban hospitals that closed during calendar 

years 1990 through 2000: 

Urban Hospital: A facility located in an urban area that provided general, 

short-term, acute medical and surgical inpatient services. 

Closed Hospital: A facility that stopped providing general, short-term, acute inpatient 

care during 1990-2000. We did not consider a hospital closed if it: 

< Merged with, or was sold to, another hospital but the physical 

plant continued to provide inpatient acute care, or 

Trends in Urban Hospital Closure: 1990-2000 3 OEI-04-02-00611 
< Both closed and reopened during the same calendar year and 

at the same physical location. 

We conducted our inspection between July 2002 and December 2002. We conducted this 

inspection in accordance with the Quality Standards for Inspections issued by the President’s 

Council on Integrity and Efficiency. 

Trends in Urban Hospital Closure: 1990-2000 4 OEI-04-02-00611 
FINDINGS 

For more than a decade, the closure of urban hospitals has generated considerable public 

interest. This issue also generated concern among the health care industry and Congress. 

Specific areas of interest included the extent, characteristics, reasons for, and impact of hospital 

closures. Our national review of urban hospital closures that occurred from 1990 through 2000 

revealed that: 

< Two hundred ninety-six hospitals closed -- 10.6 percent of all urban hospitals. 

< Urban hospitals that closed were generally smaller and treated fewer patients than 

urban hospitals nationally. 

< Generally, urban hospital closures resulted from competition, business related decisions, 

or a low number of patients. 

< Hospital services were still available within 10 miles from most of the urban hospitals 

that closed. 

Extent and Characteristics of Urban Hospitals That Closed 

Number of urban hospitals that closed 

During 1990-2000, 296 urban hospitals closed. At the beginning of the trend period, 5,466 

general, short-term, acute care hospitals were included nationally in CMS’ HCRIS database. 

Of those, 2,799 (51.2 percent) were classified as urban hospitals. 

Urban Hospitals in the U.S. in 1990 2,799 

Urban Hospitals that Closed from 1990 through 2000 296 (10.6%) 

The average annual rate of closure was 1.0 percent. The most closures for any given year 

occurred in 1999, when 43 urban hospitals closed. The lowest number occurred in 1994, 

when 11 urban hospitals closed. See Appendix A for state specific data. Figure 1 illustrates 

the annual rate of closure. 

Trends in Urban Hospital Closure: 1990-2000 5 OEI-04-02-00611 
During the 11-year period, hospital closures reduced the inpatient bed supply in urban areas by 

4.8 percent (33,253 of the 686,035 urban beds operating nationally at the beginning of the 

trend period). 

Characteristics of urban hospitals that closed 

Size : On average, urban hospitals that closed were considerably smaller than those that 

remained opened. During 1990-2000, the closed hospitals averaged 112.3 beds compared to 

an average of 240.5 beds for all urban hospitals nationally. The following figure illustrates an 

annual comparison. 

Trends in Urban Hospital Closure: 1990-2000 6 OEI-04-02-00611 
Occupancy: During the 11-year trend period, urban hospitals that closed had an average 

occupancy rate of 35.9 percent compared to an average of 53.4 percent for urban hospitals 

nationally.1 Additionally, on an annual basis, occupancy was consistently lower among urban 

hospitals that closed. An annual comparison of average occupancy is illustrated in the following 

figure. 

Net income : An average net loss (the year prior to closure) for urban hospitals that closed 

occurred in each of the 11 years that made up the trend period. In contrast, urban hospitals 

nationally averaged a positive net income each of the 11 years. Overall, the average net loss 

for urban hospitals that closed was $3,221,172 compared to a net income of $3,929,219 for 

urban hospitals nationally. An annual comparison is illustrated in Figure 4. 

1

We calculated average occupancy by dividing the actual number of patient days by the total bed days available for 

urban hospitals nationally (including those that closed). Then we summed the results and divided by the respective numbers of 

urban hospitals -- closed and nationally. 

Trends in Urban Hospital Closure: 1990-2000 7 OEI-04-02-00611 
Medicare and Medicaid utilization: According to hospital cost report data for 1990 through 

2000, urban hospitals that closed had slightly higher Medicare and Medicaid utilization rates 

than urban hospitals nationally. The average Medicare utilization for urban hospitals that closed 

was 46.4 percent compared to 45.9 percent for urban hospitals nationally.2 

Similarly, Medicaid utilization for the closed hospitals was 14.6 percent compared to the 

national average of 13.5 percent.3 See Appendix B for annual Medicare and Medicaid 

utilization data. Figure 5 highlights the overall average utilization rates for closed urban hospitals 

and urban hospitals nationally. 

2

We calculated average Medicare utilization by dividing the Medicare patient days by total patient days for urban 

hospitals nationally (including those that closed). Then we summed the results and divided by the respective numbers of urban 

hospitals -- closed and nationally. 

3

Medicaid utilization is calculated the same way as Medicare utilization. 

Trends in Urban Hospital Closure: 1990-2000 8 OEI-04-02-00611 
Number of patients affected: Consistent with their small size and low occupancy rates, 

urban hospitals that closed during 1990-2000 had a low daily census in the year prior to 

closure. 

Total patients: Nationally, urban hospitals averaged 128 patients per day in contrast to 40 

patients per day among urban hospitals that closed. 

CLOSED URBAN HOSPITALS : 

Average Number of Beds 112.34 

Average Occupancy Rate x 35.94% 

Average Number of Patients Daily 40.37 

PATIENT CENSUS 

Medicare and Medicaid patients: The average number of urban Medicare patients per day 

was 59 nationally, compared to 19 for the hospitals that closed. Furthermore, the average 

number of Medicaid patients per day was 17 nationally, in contrast to 6 in urban hospitals that 

closed. 

CLOSED URBAN HOSPITALS : 

Medicare Medicaid 

Average Number of Patients Daily 40.37 40.37 

Average Medicare and Medicaid Utilization Rate x 46.39% x 14.60% 

Average Number of Medicare and Medicaid Patients 18.73 5.89 

MEDICARE AND MEDICAID CENSUS 

Trends in Urban Hospital Closure: 1990-2000 9 OEI-04-02-00611 
Reasons For Urban Hospital Closure 

Officials reported various factors that contributed to urban hospital closures. The primary 

reasons, however, were competition with other hospitals or business-related decisions, such as 

relocations, consolidations, or mergers. Additionally, hospitals closed due to other factors, 

including a low number of patients (low occupancy/low census) or lagging revenues. 

During 1990-1997, we reported the reasons for hospital closure in four of our annual reports 

(1990, 1993, 1996, and 1997); however, that information did not differentiate between urban 

and rural closures. During those years, hospitals (urban and rural combined) generally closed 

because of low occupancy, lagging revenues, rising costs, or a combination of these factors. 

From 1998 through 2000, we collected information specific to the reasons for urban hospital 

closure. To determine those reasons, we interviewed senior executives, legal council, or other 

officials associated with the closed hospitals. Though some officials reported more than one 

reason for closure, the following information focuses on what they stated to be the primary 

reasons. 

During 1998-2000, 113 urban hospitals closed. Officials associated with 31 (27.4 percent) of 

those hospitals reported that the primary reason for closure was competition with other nearby 

hospitals. Additionally, 30 (26.6 percent) of the closures were attributed to a business-related 

decision, such as relocation, consolidation, or merger. An insufficient number of patients (low 

occupancy/low census) was reported to be the primary reason for 16 (14.2 percent) of the 

closures. 

Hospital officials associated with 12 (10.6 percent) of the hospitals included Medicare and 

Medicaid reimbursements as the primary reasons for closure. Of those, 11 stated that 

additional reasons, such as competition and an insufficient number of patients, also contributed. 

Only one official reported Medicare and Medicaid as the only reasons for the hospital closing. 

Our analysis of hospital cost report data showed the occupancy rate for that hospital, however, 

was 17.8 percent compared to the national average of 53.4 percent. Additionally, a 644-bed 

hospital was located just over 3 miles away. 

Of the remaining 24 urban hospitals that closed, 12 (10.6 percent) were reported to have 

closed for various other reasons, such as mismanagement or old and damaged buildings. 

Officials associated with the remaining 12 (10.6 percent) hospitals did not report a specific 

reason for closure; however, 10 of those 12 hospitals had average occupancy rates that were 

lower than the national average. Figure 6 provides a comparison of the primary reasons for 

hospital closure. 

Trends in Urban Hospital Closure: 1990-2000 10 OEI-04-02-00611 
Impact of Urban Hospital Closure 

Distance to inpatient and emergency care 

Inpatient care : In 268 of the 296 (90.5 percent) urban communities where a hospital closed, 

inpatient care was available within 10 miles from the closed hospital. Furthermore, residents in 

290 (98 percent) of those communities could get inpatient care within 20 miles from the closed 

hospital. For example, after the 1998 closure of a Dallas, Texas hospital, residents still had 

access to inpatient care at three different full-service hospitals that were located within close 

proximity to the closed facility -- the closest being 1 mile. 

Figure 7 shows summary information on the distances closed hospitals were from inpatient care 

that was still available. 

Trends in Urban Hospital Closure: 1990-2000 11 OEI-04-02-00611 
Emergency services: When a hospital closes, the community potentially loses access to 

emergency services as well as inpatient care. In 274 of the 296 (92.6 percent) urban 

communities where a hospital closed, emergency care was available within 10 miles of the 

closed hospital. Residents in 293 (99.0 percent) of those communities could get emergency 

care within 20 miles from the closed hospital. For example, a hospital in San Francisco, 

California stopped providing inpatient and emergency services in 1999. Residents could still 

receive 24-hour emergency services at a hospital that was located 2 miles from the closed 

facility. 

Figure 8 shows summary information on the distances closed hospitals were from emergency 

care that was still available. 

Trends in Urban Hospital Closure: 1990-2000 12 OEI-04-02-00611 
Impact of hospital openings 

Hospital openings: Many hospitals opened or reopened in urban communities from 1990 

through 2000, reducing the national impact of hospital closure. However, prior to 1998, we 

did not identify such data specific to rural or urban classifications. From 1990 through 1997, 

64 hospitals (urban and rural combined) opened or reopened. Those 64 hospitals are an 

aggregated total of openings and reopenings; therefore, we cannot identify how many of them 

were in urban communities. 

During 1998 through 2000, 37 urban hospitals either opened or reopened, reducing the national 

impact of the 113 urban hospitals that closed during that timeframe. Figure 9 illustrates the net 

number of urban hospital closures for those 3 years. 

As stated earlier in the report, 30 (26.6 percent) of the urban hospitals that closed from 1998 

through 2000 were due to business-related decisions such as relocation, consolidation, or 

merger. Of those closures, six (20 percent) were the direct result of relocation to newer 

buildings. When a hospital changed location, we reported it as a closure because the hospital 

had stopped providing general, short-term, acute care services in the physical plant from which 

it moved. However, for each of the six hospitals that relocated, the closure was offset by an 

opening of hospital services within a new building – less than 6 miles from the old building. 

Therefore, impact on access to care was minimal when a hospital relocated. 

Trends in Urban Hospital Closure: 1990-2000 13 OEI-04-02-00611 
APPENDIX A 

URBAN HOSPITAL CLOSURES BY STATE

During the 11-year trend period, urban hospitals closed in 40 states 

California had the greatest number of urban closures (50), followed by Texas (40), Florida 

(21), Michigan (17) and Massachusetts, Ohio and Pennsylvania (12). These seven states 

account for 55.4 percent of all urban hospital closures from 1990 through 2000. The following 

charts illustrate the frequency of closure for each state. 

Rate of Urban Closures 

> 20 (3) 

6 - 20 (16) 

1 - 5 (21) 

No Closures (11) 

Urban Closures By State 

Trends in Urban Hospital Closure: 1990-2000 14 OEI-04-02-00611 
APPENDIX A Cont. 

Number of Urban Hospital Closures By State 

California 50 

Texas 40 

Florida 21 

Michigan 17 

Massachusetts 12 

Ohio 12 

Pennsylvania 12 

Missouri 9 

New York 9 

Georgia 8 

Virginia 8 

Illinois 7 

Louisiana 7 

New Jersey 7 

Oklahoma 7 

Tennessee 7 

Arizona 6 

Minnesota 6 

Washington 6 

Maryland 5 

Wisconsin 5 

Alabama 4 

Connecticut 4 

Oregon 3 

South Carolina 3 

Arkansas 2 

Colorado 2 

Indiana 2 

North Carolina 2 

North Dakota 2 

West Virginia 2 

District of Columbia 1 

Delaware 1 

Kentucky 1 

Maine 1 

Mississippi 1 

New Mexico 1 

Nevada 1 

Rhode Island 1 

Utah 1 

Trends in Urban Hospital Closure: 1990-2000 15 OEI-04-02-00611 
APPENDIX B 

MEDICARE AND MEDICAID UTILIZATION

Medicare utilization: Urban hospitals that closed had an average Medicare utilization of 46.4 

percent compared to an average of 45.9 percent for urban hospitals nationally. Medicare 

utilization was slightly higher among urban hospitals that closed in 7 of the 11 years, as 

shown in the following figure and table. 

Annual Medicare Utilization Rates for Urban Hospitals 

Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 

National Avg. % 44.8 45.8 46.7 47.1 47.9 48.8 48.4 48.0 46.4 40.9 39.9 

Closed Avg. % 50.7 42.9 49.4 51.4 49.8 54.6 46.7 40.5 38.8 44.3 46.5 

Trends in Urban Hospital Closure: 1990-2000 16 OEI-04-02-00611 
APPENDIX B Cont. 

Medicaid utilization: Urban hospitals that closed had an average Medicaid utilization of 14.6 

percent compared to an average of 13.5 percent for urban hospitals nationally. Although these 

averages are comparable, the yearly statistics show some variation, as reflected in the following 

figure and table. 

Annual Medicaid Utilization Rates for Urban Hospitals 

Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 

National Avg. % 12.3 11.7 12.8 13.6 14.0 13.9 14.0 14.0 14.4 14.0 13.7 

Closed Avg. % 11.8 17.4 13.9 14.8 16.7 10.9 11.9 17.1 22.4 16.0 10.4 

Trends in Urban Hospital Closure: 1990-2000 17 OEI-04-02-00611 
ACKNOWLEDGMENTS 

This report was prepared under the direction of Bill Moran, Acting Regional Inspector General for 

Evaluation and Inspections in the Atlanta Regional Office and Graham Rawsthorn, Assistant Regional 

Inspector General. Other principal Office of Evaluation and Inspections staff who contributed include: 

Kevin Lawrence, Lead Analyst Tricia Davis, Director, Medicare and Medicaid

Joe Townsel, Team Leader Linda Moscoe, Program Analyst 

Gerius Patterson, Program Analyst

Trends in Urban Hospital Closure: 1990-2000 18 OEI-04-02-00611