A 7 minute read
illustration of a hospital next to a pixelated map of the united states with an american flag in the background
August 19, 2020

In 1975, the United States reported a total number of 7,156 hospitals. Since then, factors like competition, industry consolidation, and rising healthcare costs have contributed to a slow decline in the total number of U.S. hospitals.

This blog addresses two main questions:

  1. How has the number of U.S. hospitals changed from 1975 to 2020?
  2. Which factors have most affected this decline?

How many hospitals are in the U.S. in 2020?

According to the American Hospital Association (AHA), there are a total of 6,146 hospitals in the United States. But this statistic can change depending on how organizations classify each hospital type.

For instance, Definitive Healthcare data shows that there are a total of 7,247 active hospitals in the United States as of August 2020. This number includes nine different facility types, including:

  • Short-term acute care hospitals
  • Long-term acute care hospitals
  • Children’s hospitals
  • Critical access hospitals
  • Psychiatric hospitals
  • Rehabilitation hospitals
  • VA hospitals
  • Department of Defense hospitals
  • Religious non-medical health care institutions

The AHA may track different facility types in its annual reporting, which could cause a discrepancy in the total number of hospitals.

What are the most common hospital types?

Short-term acute care hospitals are the most common type of hospital in the United States. Definitive Healthcare classifies over half of all U.S. hospitals in this way. Short-term acute care hospitals follow a traditional hospital model. In this model, patients receive short-term emergency or non-urgent medical care for an injury, illness, or other condition within an inpatient setting.

There are, however, many different hospital types. Classification can change depending on things like:

  • Hospital size
  • Funding type
  • Ownership
  • Certifications
  • Specialty
  • Local population density

Critical access hospitals, for instance, are the second most common hospital type in the United States. This classification refers to small, rural hospitals that provide healthcare to underserved communities. Critical access hospitals play an essential role in improving healthcare access. Because of this, they receive most of their payer reimbursements from the Centers for Medicare and Medicaid Services (CMS).

Most common hospital types by number of facilities in the U.S.

Rank Hospital Type Total Number of Facilities
1 Short-term acute care hospital 3,935
2 Critical access hospital 1,345
3 Psychiatric hospital 735
4 Long-term acute care hospital 398
5 Rehabilitation hospital 357
6 Children's hospital 262
7 VA hospital 162
8 Department of Defense hospital 37
9 Religious non-medical health care institution 16

Fig 1 Data is from Definitive Healthcare's Hospitals & IDNs database. Total number of facilities represents only those hospitals listed as "active" in the Definitive Healthcare database as of August 12, 2020. Information about “active” facility status is collected through proprietary Definitive Healthcare research and is updated on a continuous basis. Accessed August 2020.

Children’s hospitals, psychiatric hospitals, and rehabilitation hospitals are considered specialty hospital types. This is due to the specific patient populations they serve and the specialized care they provide.

VA hospitals and Department of Defense hospitals are distinct from other facility types. This is because they are owned and operated by the federal government. They also limit care to patients who are currently serving, or once served as active members in the U.S. army, navy, air force, national guard, or reserves.

Religious non-medical health care institutions are the least common hospital type in the United States. As of August 2020, Definitive Healthcare tracks only 16 of these active facilities. This type of hospital provides 24-hour non-medical care to patients whose religious beliefs prevent them from accepting medical examinations, diagnoses, or treatments. Because of these restrictions, religious non-medical health care institutions primarily help patients with daily activities, nutritional needs, and comfort.

Why is the total number of U.S. hospitals declining?

Industry consolidation is one of the driving forces behind the declining number of hospitals in the United States. This consolidation has contributed to the decline in U.S. hospitals for several decades.

According to a 2003 trend report from the Department of Health and Human Services, the U.S. saw a total of 296 urban hospital closures and 208 rural hospital closures between 1990 and 2000. Forty-three percent of rural hospitals and 26 percent of urban hospitals reported that the facility closures were due to relocation, consolidation, or mergers.

In 2019, Definitive Healthcare tracked a total of 186 facility closures. Most of these, however, are partial closures resulting from hospital finances and not industry consolidation. The partial closures affect hospital services like:

  • Surgical units
  • Emergency services
  • Maternity wards
  • Mental health services

These hospital services are among the costliest to staff and maintain.

Changes to payer reimbursement structures can negatively impact hospital finances, as well. The transition to CMS value-based care reimbursements has had a particularly strong impact. For instance, if a hospital receives poor clinical and quality performance scores, they will receive lower Medicare and Medicaid reimbursements as a result.

Rising medical and surgical supply costs can also have a significant impact on hospital finances. According to Definitive Healthcare data, the average U.S. hospital spent $11.9 million in annual medical and surgical supply costs in 2018. Supply costs as high as this can cause decreases in profit margins. If hospitals cannot reduce operating expenses in other ways, these supply costs may cause facilities to close.

How might COVID-19 contribute to the declining number of U.S. hospitals?

As of August 2020, Definitive Healthcare has tracked a total of 75 facility closures. The majority of these are temporary facility closures due to the COVID-19 pandemic.

For some hospitals, temporary closure means suspending surgical procedures or other hospital services. Doing this allows them to divert those available resources to COVID-19 patients. For other hospitals, closure is a result of significant staffing shortages or financial deficits. Challenges like these ones require some facilities to suspend all hospital services.

It is too soon to know what sort of lasting impact the COVID-19 pandemic will have on U.S. hospitals. But some of the temporary hospital closures we see now could turn into permanent facility closures later. The pandemic could cause the total number of U.S. hospitals to decline more than expected.

Since the rapid onset of COVID-19 in early March 2020, many patients have also been delaying essential care. These delays are causing patient visits to decline at hospitals and other care sites across the United States.

So many patients are afraid to visit hospitals because of COVID-19. Because of this, outpatient facilities may feel like a more comfortable alternative after the COVID-19 pandemic has ended. The outpatient market was already growing at a significant rate before the pandemic. This renewed preference for outpatient care could cause hospital visits to further decline. Over time, fewer hospital visits could prompt more U.S. hospitals to close permanently.

Learn more

Interested in learning about other ways that the COVID-19 pandemic might impact U.S. hospitals in 2020 and beyond? Take a look at an on-demand replay of our webinar, Updated Healthcare Industry Trends: Selling to Doctors and Hospitals in a Changed Market.

Definitive Healthcare CEO, Jason Krantz, addresses some of the trends that have emerged from the COVID-19 pandemic. He also discusses how these might impact selling to healthcare providers going forward.

*Originally published February 27, 2019


ABOUT THE AUTHOR

Rachel Grande

Rachel Grande is a communications professional and published author. She holds a master’s degree in Creative Writing from the University of Glasgow, and brings nearly two years of prior experience as ...


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