The changing landscape of hospital capacity in large cities and suburbs: implications for the safety net in metropolitan America.

An analysis of trends in hospital use and capacity by ownership status and community poverty levels for large urban and suburban areas was undertaken to examine changes that may have important implications for the future of the hospital safety net in large metropolitan areas. Using data on general acute care hospitals located in the 100 largest cities and their suburbs for the years 1996, 1999, and 2002, we examined a number of measures of use and capacity, including staffed beds, admissions, outpatient and emergency department visits, trauma centers, and positron emission tomography scanners. Over the 6-year period, the number of for-profit, nonprofit, and public hospitals declined in both cities and suburbs, with public hospitals showing the largest percentage of decreases. By 2002, for-profit hospitals were responsible for more Medicaid admissions than public hospitals for the 100 largest cities combined. Public hospitals, however, maintained the longest Medicaid average length of stay. The proportion of urban hospital resources located in high poverty cities was slightly higher than the proportion of urban population living in high poverty cities. However, the results demonstrate for the first time, a highly disproportionate share of hospital resources and use among suburbs with a low poverty rate compared to suburbs with a high poverty rate. High poverty communities represented the greatest proportion of suburban population in 2000 but had the smallest proportion of hospital use and specialty care capacity, whereas the opposite was true of low poverty suburbs. The results raise questions about the effects of the expanding role of private hospitals as safety net providers, and have implications for poor residents in high poverty suburban areas, and for urban safety net hospitals that care for poor suburban residents in surrounding communities.

Does the profit motive make Jack nimble? Ownership form and the evolution of the US hospital industry.

We examine the evolving structure of the US hospital industry since 1970, focusing on how ownership form influences entry and exit behavior. We develop theoretical predictions based on the model of Lakdawalla and Philipson, in which for-profit and not-for-profit hospitals differ regarding their objectives and costs of capital. The model predicts for-profits would be quicker to enter and exit than not-for-profits in response to changing market conditions. We test this hypothesis using data for all US hospitals from 1984 to 2000. Examining annual and regional entry and exit rates, for-profit hospitals consistently have higher entry and exit rates than not-for-profits. Econometric modeling of entry and exit rates yields similar patterns. Estimates of an ordered probit model of entry indicate that entry is more responsive to demand changes for for-profit than not-for-profit hospitals. Estimates of a discrete hazard model for exit similarly indicate that negative demand shifts increase the probability of exit more for for-profits than not-for-profits. Finally, membership in a hospital chain significantly decreases the probability of exit for for-profits, but not not-for-profits.

Betting big on doc ownership. 'Boutique' chain blasts off with $1 billion investment, plans for 10 hospitals, and hopes to create healthcare model of the future.

A new "boutique" chain is roaring out the gate with $1 billion to spend and plans for 10 hospitals. University General Hospital Systems, which aspires to offer the feel of a luxury hotel in its facilities, is wading into the thick of some of the most controversial issues in healthcare. All but one of its hospitals are planned for states without CON laws, according to W.J. "Bill" Burk, left.

A bigger piece of the pie. For-profit facilities climb to 16% of all community hospitals, as not-for-profits struggle with access to capital, rural challenges.

The percentage of investor-owned hospitals is at an all-time high, helped in part by sales of not-for-profit facilities. Hillcrest HealthCare System's board decided to sell 10 of its hospitals after taking a hard look at its finances. "We weren't concerned about the short term, but the long term," Don Lorack, left, said.

Hospital conversion trends.

This DataWatch presents information on the extent, geographic distribution, and other issues related to hospital conversions during the 1980s and 1990s. On average, 1 percent of hospitals convert each year. Many states experienced hospital conversions, but much of the conversion activity was concentrated in California, Florida, Georgia, and Texas. While conversions of not-for-profit hospitals to for-profit status have received significant attention, conversions of public hospitals and for-profit hospitals raise complex policy issues, as well.