Midwest Home To Hospital \"Wastelands\"
A Boston University healthcare economics professor who closely studies healthcare finance has located what he terms “hospital wastelands” in two major cities in the Midwest.
According to Alan Sager, a professor of health policy and management at BU's school of public health and director of its health reform program, both the northern portion of St. Louis and the entire city of Detroit should be considered hospital wastelands because they are virtually devoid of acute care providers. Indeed, the Motor City has just four hospitals for nearly 800,000 inhabitants.
“Detroit's lost half of its population, but 90% of its hospitals,” Sager said at last week's annual conference of the Association of Health Care Journalists in Boston, where he sat on a panel comparing the economics of poor and wealthy hospitals with Boston Medical Center Chief Executive Officer Kate Walsh and two healthcare journalists, Karen Garloch of the Charlotte Observer and Margot Sanger-Katz of the National Journal.
The loss of hospitals in Detroit is a piece with that city's devastating depopulation that began with the loss of automobile manufacturing jobs that began in the early 1970s. Earlier this month, Gov. Rick Snyder appointed an emergency manager in a last-ditch attempt to straighten out the city's finances, which include $14 billion of long-term debt and a tax base a fraction of what it was a half-century ago.
According to Sager's research, which has tracked hospital comings and goings since 1936, the losses in St. Louis are more recent, and can be traced primarily over the last decade.
“There are no longer hospitals in the northern part of that city,” he said.
Sager linked the loss of hospitals to a variety of factors: Those that are more likely to close are mid-sized or smaller non-teaching facilities located in predominantly minority neighborhoods with low incomes and high rates of uninsured. Each closure often has a domino effect, with patients in the neighborhood a less likely to receive inpatient care in the year or so immediately after a closure. That puts even more financial pressure on the surviving facilities, and can eventually hasten their demise, he said.
Conversely, those hospitals that have remained in or near the Detroit and St. Louis “wastelands” are more likely to be teaching facilities, which are far more expensive to operate than their non-teaching brethren. According to Sager's research, 77% of the teaching hospitals in the U.S. are located in major cities, compared with 40% in 1950.
“The poor are receiving the world's most expensive care,” he said.
Although Sager recommended that free market forces prevail in determining how hospitals fare, it rarely applies these days, which is among the reasons why hospital services have shrunk due to lack of revenues even though the cost of delivering care continues to rise.
Meanwhile, Sager observed that half of the hospital beds in Detroit are controlled by the for-profit hospital chain Vanguard Health Systems, which operates Detroit Medical Center and Detroit Receiving Hospital. Should both lose money, Vanguard could eventually reconsider their futures, he noted.
