A 4 minute read
Smiling doctor looking at a patient on a wheelchair in hospital hallway
February 27, 2019

There were more than 7,200 active U.S. hospitals in 2017 according to Definitive Healthcare's Hospitals and IDNs platform. This includes facilities such as short- and long-term acute care, critical access, psychiatric, VA, DOD, and rehabilitation hospitals as well as faith-based non-medical care facilities. 

The true number of active hospitals is disputed depending on which organization is reporting the statistic. The American Hospital Association (AHA) reported only 6,200 active U.S. hospitals in 2017. This is an increase from 2016, when the AHA reported a total of 5,534 active hospitals. The growth is attributed to a shift in AHA hospital classification rather than new facilities opening. Hospitals counted in the AHA list are generally community hospitals, including short- and long-term acute care, rehabilitation, and other specialty facilities.

Since 1975, the number of active hospitals has steadily declined by more than 12 percent — from more than 7,100 hospitals to just over 6,200. The most dramatic decline occurred between 1990 and 2000, with the decrease stagnating between 2000 and 2016. Similarly, the number of hospital beds experienced a drastic decline from 1975 to 2016. The AHA reported more than 1.4 million hospital beds in 1975 and about 894,000 in 2016, a decrease of just under 40 percent. Again, the most dramatic decline occurred between 1995 and 2000, with a steady total loss of under 100,000 beds since 2000.

Most common hospital types by number of facilities:

  1. Short-Term Acute Care Hospital: 3,933
  2. Critical Access Hospital: 1,343
  3. Psychiatric Hospital: 724
  4. Long-Term Acute Care Hospital: 431
  5. Rehabilitation Hospital: 331
Fig 1 Data from Definitive Healthcare's hospital platform, which tracks intelligence on over 7,200 hospitals and inpatient care facilities. Facility status verified by internal research team.

The reasoning behind the sharp drop in the number of active hospitals is not entirely clear. Some modern experts say the traditional inpatient approach is hurting hospital performance in an era where more patients are seeking outpatient care. However, this trend is relatively recent, with urgent care and retail clinics gaining the most traction within the last 5 years.

One possible explanation for the sharp decrease could be the national move toward deinstitutionalization for patients with mental health issues, which was prompted by widespread advocacy and the introduction of Social Security Disability in the 1970s. Healthcare spending growth has also slowed since the 1970s according to the Kaiser Family Foundation. In the 1970s and 1980s, the growth rate of healthcare spending was more than 3 percentage points greater than GDP growth. Since 2010 healthcare spending growth slowed to roughly match GDP growth, though per capita expenditures continue to rise from roughly $120 annually ($600 after adjusting for inflation) to more than $1,100.

An industry-wide shift toward outpatient care has helped ameliorate some healthcare expenses, particularly when it comes to common procedures such as cataract removal (HCPCS code 66984), colonoscopies (HCPCS code 45385), and knee replacements (HCPCS code 29881). Outpatient surgery centers routinely report lower costs than hospital outpatient centers. This is likely because surgery centers have fewer expenditures than hospitals, and don't need surgical costs to cover the price of specialized medical devices and durable medical equipment. These savings can then be passed on to patients.

Cost Compare: Hospital versus Outpatient Surgery Center

Rank HCPCS Code Description Avg Hospital Cost Avg ASC Cost
1. 66984 Cataract surgery with intraocular implant 1 stage $1,424 $952
2. 63685 Insrt/redo spine n generator $24,924 $20,384
3. 45380 Colonoscopy and biopsy $732 $401
4. 45385 Colonoscopy w/lesion removal $573 $467
5. 43239 Egd biopsy single/multiple $499 $308

Fig 2 Ranked procedures are the top 5 surgeries performed at surgery centers in 2017 by total charges. All procedure and cost data from Centers for Medicare and Medicaid Services (CMS) Ambulatory Surgery Center Limited Data Set (LDS) and Annual Medicare Data is from the Centers for Medicare and Medicaid Services (CMS) Medicare Standard Analytical Files (SAF). All-Payor Estimates are based on Definitive Healthcare calculations and algorithms.

To learn more about how the shift toward outpatient care continues to change the face of the healthcare landscape, including the presence of non-hospital care facilities, stream our webinar:

Webinar: Shifting to Outpatient Care

Footnote: The discrepancy in the number of active U.S. hospitals is due to the differing ways in which Definitive Healthcare and the AHA categorize care facilities. Where both Definitive Healthcare and the AHA include federal and non-federal hospitals and specialty care facilities, Definitive also includes religious non-medical care facilities. In addition, when medical centers report hospitals on disparate campuses, each facility is counted as a distinct hospital.

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