Is the end near for small community hospitals?

Are the days numbered for Salem Community Hospital and other community hospitals around the country? Recently, a local story happened that made me think of this.

The announcement was made that the Akron General Health System was being purchased by a joint venture of Cleveland Clinic and Community Health Systems (CHS). CHS is a Tennessee-based hospital operator who also owns three other hospitals in the Northeastern Ohio area where I live.

Six months ago, Akron City Hospital along with the rest of the Summa Health System announced that they were joining Catholic Health Partners (CHP), the largest hospital system in Ohio.  CHP owns a hospital in the Youngstown, Ohio market, close to where I live.

There are two hospitals in Columbiana County: Salem Community Hospital and East Liverpool City Hospital. As of this second, these two hospitals are still independently owned and operated, but for how long?

I am by no means a hospital policy expert. But, it’s not hard to see that across country, smaller hospitals are either being bought or joining larger hospital systems. This has already played out in Ohio’s larger cities of Cleveland, Toledo, and Columbus.

Salem Community Hospital (SCH) is in the midst of building a new patient tower with 87 private rooms. SCH also boasts the area’s only 3T open MRI unit between Cleveland and Pittsburgh. On the negative side, SCH recently announced the resignation of their CEO, but states that current leadership is still committed to the future. Will all that be enough to sustain hospital independence, or is aligning with a larger hospital system (like Cleveland Clinic, CHS, CHP, or even University of Pittsburgh Medical Center) inevitable at some point?

Why one-third of hospitals will close by 2020” is an essay that says, “What hospitals are about to enter is the place Americans cherish: the open competitive market. We know what happens in this environment. There are winners and losers.”

Not so fast says Becker’s Hospital Review in an article entitled, “Hometown Healthcare Isn’t Dead: Why (Most) Smart Community Hospitals Can Still Thrive.” The hidden strengths of community hospitals, according to the article, include nimbleness to adapt to change and the ability to achieve higher quality, greater patient engagement, and lower cost — easier than the larger hospitals.

What will be the ultimate fate of Salem Community Hospital and others like it? Some say that the hospital industry will be like the airline industry where there will be a few large players nationally and the small companies will merge or fail.

I think the community hospital model will be similar to the banking industry. There will always be that locally owned community bank that the community gets behind and supports because it is neighbors helping neighbors. The only way small community hospitals will survive is if the community finds value in it and will continue to support the hospital, not only in its hospital services, but also with word of mouth and positive community reputation. Without that, you might as well pick who you’re going to merge with, or close up the hospital altogether.

Mike Sevilla is a family physician who blogs at his self-titled site, Dr. Mike Sevilla.

Comments are moderated before they are published. Please read the comment policy.

  • Matt

    “What hospitals are about to enter is the place Americans cherish: the open competitive market.”

    In whose world?

    In an open and competitive market, anyone would be allowed to open a hospital, anywhere they like, and charge anything they like, and even decide which patients they will and will not see and what insurance plans (if any) they will accept.

    That simply isn’t the case. In most states, there’s a governmental board which severely restricts the number and placement of new hospitals, and they are heavily regulated by both state and federal governments.

    • FFP

      This is less competitive than the cable TV or Internet provider market. In most markets, one won’t even have 2 players. This will be the dictatorship of big (medical) corporations; the word “monopoly” doesn’t even begin to cover it.

      • Chris

        Working in American healthcare will be as emotionally and financially rewarding as being a clerk in the DMV. Nobody is going to invest a decade of their young productive life and hundreds of thousands of dollars for THAT. You are one hundred percent correct.

        • FFP

          I come from a country like that, Chris. I have seen it happening before.

          Where I am from, the young doctors emigrate to developed countries in high numbers (that’s the reason they actually go to medical school). The ones that stay are the worst-prepared ones, who know they could not find a job abroad. As a consequence, if one wants a really good doctor there, one might not find one, and might have to go abroad for something as simple as a correct medical diagnosis.

          Human psychology is all a matter of incentives, disincentives and paths of least resistance. I make a decent living as a doctor (for now), but the stress created by this continuous governmental meddling makes me think about alternatives, long-term. I just can’t see myself as an employed drone, supervising midlevels instead of direct patient care, dealing with double the number of patients I should, unable to spend extra-time with my patients without taking that from the time I can spend with my family etc., all of this why highly paid executives – who contribute zero to the real care of those patients – are paid millions at NON-PROFIT hospitals.

    • Chris

      They keep using the phrase “the open competitive market” in relation to American healthcare. I do not think that phrase means what they think it means.

      • T H

        It is inconceivable that there will be many hospitals springing up to offer competition to small community hospitals. It IS conceivable that large hospitals >20miles away from the community could make it impossible for the local community hospital to survive.

        • FFP

          It’s not “conceivable”, it’s HAPPENING as we speak. What kind of quality and price do you expect from a regional monopoly setting where, by the end of 2014, most hospital systems will dominate 30-50% of a state or more?

          • T H

            Thank you for making my point for me. That is exactly what I am talking about.

  • Anthony D

    There are 5724 hospitals in the USA, of which a mere 238 are physician owned.

    An astonishing 9 out of the top 10 highest quality, and half of the top
    100 highest quality hospitals, are from this tiny pool of MD owned
    facilities.

    So if the misnamed “Affordable Care Act” had any real interest in
    quality of care, there would be encouragement of more physician ownership
    of hospitals. (Hint: The ACA worsens health care quality).

  • guest

    As long as these for profit chain hospitals can be invested in the stock market we’re in trouble. Sounds like soon if not already American hospitals will be owned by foreign companies. It’s the equivalent of Walmart vs. mom and pop stores.

    • Tim

      The stuff at our local mom and pop store is hellishly over-priced and often out-of-date and skeevy-looking. There’s not much choice, either, if you want catsup, you have to take the one brand they have, and if you needed whole milk, but they’ve only got skim, then you have to settle for skim or do without. Bleh.

      • guest

        OK maybe not a good analogy really. But do you really think that a hospital owned by a large chain out of state is going to care about servicing the people in the local community? They are a business and finance is the game not necessarily good patient care.

        • FFP

          I don’t see why a for-profit hospital would not provide good care. Au contraire, they would have an increased incentive for it, especially in a competitive market. They would just not waste money on things that don’t actually improve outcome (just because it’s politically correct), and they would probably not take every insurance.

          Our problem is not that for-profit hospitals do what they do; it’s the waste in the not-for-profit hospital, where the (uber well-paid) administrative board decides based on local politics, not on financial interests, like any normal business would do, and where Medicare-generated bureaucracy is king (as in: less medicine more protocols).

  • Beej47

    Large and for-profit hospitals do not always provide the best care for the least cost. Look at HCAHPS, infection rates, average costs, etc. For-profit hospitals will manage HCAHPS for the highest return to the shareholders; not what’s best for the patient. Large hospitals are just beginning to follow this Corporate America strategy just like banks, airlines and others have mastered so well and make all their customers miserable.

Most Popular