Financial Factors Cause Emergency Department Closures

Emma Hitt, PhD

May 17, 2011

May 17, 2011 — From 1990 to 2009, the number of hospital emergency departments (EDs) in nonrural areas decreased by 27%. Factors associated with increased risk for ED closure included for-profit ownership, location in a competitive market, "safety-net" status, and low profit margin, a new study has found.

The analysis, led by Renee Y. Hsia, MD, from the Department of Emergency Medicine at the University of California–San Francisco, and colleagues was reported in the May 18 issue of the Journal of the American Medical Association.

According to the researchers, EDs are the "safety net of the safety net," being the only medical facilities in the United States that serve all patients. Although federal law requires EDs to treat all patients, "no federal law ensures the availability of hospital EDs," the authors note.

The current study sought to evaluate hospital, community and market factors that may be associated with ED closings throughout the United States. The most recent data on EDs from 1990 through 2009 were acquired from American Hospital Association Annual Surveys and were combined with financial information collected through 2007 and derived from Medicare hospital cost reports.

From 1990 to 2009, the number of ED hospitals in nonrural areas declined from 2446 to 1779, including 1041 ED closings and 374 ED openings.

A higher percentage of for-profit hospitals, as well as hospitals with low profit margins, closed between 1990 and 2007 compared with EDs in each of those categories that stayed open (26% vs 16%; hazard ratio [HR], 1.8; 95% confidence interval [CI], 1.5 - 2.1; and 36% vs 18%; HR, 1.9; 95% CI, 1.6 - 2.3 respectively).

In addition, hospitals in more competitive markets had an increased risk of closing their EDs (34% vs 17%; HR, 1.3; 95% CI, 1.1 - 1.6), as did safety-net hospitals (10% vs 6%; HR, 1.4; 95% CI, 1.1 - 1.7), and those serving a disproportionally poor population (37% vs 31%; HR, 1.4; 95% CI, 1.1 - 1.7).

Study limitations include assessment of only quantifiable factors; political or other community pressures to close or stay open, philanthropic efforts, the hospital’s ability to fill beds with non-ED admissions or other factors that may contribute to ED closure decisions were not considered. In addition, federal hospitals, such as those operated by the Veteran’s Administration, were not evaluated.

"Our findings underscore that market-based approaches to health care do not ensure that care will be equitably distributed," Dr. Hsai and colleagues conclude. "In fact, the opposite may be true."

According to the researchers, as long as "tens of millions of Americans are uninsured, and tens of millions more pay well below their cost of care, the push for 'results-driven competition' will not correct system-level disparities that markets cannot — and should not — be expected to resolve."

The study was funded by the National Institutes of Health and the Robert Wood Johnson Foundation. The authors have disclosed no relevant financial relationships.

JAMA. 2011;305(19):1978-1985.