Hospital closures: 3 factors behind the decision

Why do hospitals close? Why do others that are financially struggling able to stay open? It boils down to three factors, Becker's Hospital Review reports.

The biggest reason is location, the publication reports. Most of the hospitals that have closed in recent years are in rural locales. Indeed, more than one in eight rural hospitals are in danger of closure, according to a study undertaken last year by iVantage Health Analytics.

Moreover, if the hospital is in a southern state--they are more likely to close as well, according to the Becker's piece. In Mississippi, for example, where few adults are even eligible for Medicaid coverage, fully a third of the hospitals are financially vulnerable and could close.

Another big reason for closure is an unexpected expense, particularly for a hospital operating on an extremely tight margin. An unexpected plumbing problem forced the closure of McNairy Regional Hospital in Tennessee, Becker's reported.

A third factor that could a hospital to close is that it is the weakest performer in a larger hospital network. That was the fate that recently befell Southeast Health Center of Reynolds County in Missouri and Saddleback Memorial Hospital in San Clemente, California, according to the article.

To learn more:
- read the Becker's Hospital Review article

Suggested Articles

A commonly used format for formulary submissions has been updated to enable drug companies to share information with payers on unapproved products.

NextGen Healthcare's Rusty Frantz sounded off about hospitals opposing proposed federal data-sharing rules while also sharing data with tech giants.

Welcome to this week's Chutes & Ladders, our roundup of hirings, firings and retirings throughout the industry.