University of California at Berkeley

The Empty Bed Syndrome

As HMOs Take Over, We're Using Hospitals Less, Leaving Many in Financial Distress

 by Patricia McBroom

Inpatient hospital care has declined by 30 percent in California in just a decade, faster than anywhere else in the nation, according to a comprehensive analysis of hospital and patient records carried out at Berkeley.

The analysis of inpatient days at 90 percent of hospitals in California between 1983 and l993 reveals "a historic transformation in the role of the hospital," said James C. Robinson, professor of public health.

After being the center of the medical system throughout the century, hospital inpatient care has now moved to the periphery, said Robinson in an article published Oct. 1 in the Journal of the American Medical Association. In place of the old style hospital care is a large increase in outpatient surgeries -- which more than doubled during the decade -- and an expansion of care delivered in the doctor's office or at home, along with an increase in "nursing home" care.

Robinson explained that many of the half-empty hospitals in California have added nursing home units, as reflected in a 210 percent increase in non-acute inpatient days.

This transformation is being driven by health maintenance organizations that have penetrated medical care more thoroughly in California than elsewhere, said Robinson.

Its economic effects have been to slow medical inflation (by 44 percent in areas of high HMO penetration) and to leave many hospitals in dire financial straits, said Robinson.

"Hospitals have lost 30 percent of their business, and these are expensive institutions to run," said Robinson.

Hospitals have fought back by diversifying their services into ambulatory care units and creating new alliances with physician groups, but 19 percent of California's private hospitals closed their doors during the decade under study, and more will soon follow suit, he said.

Robinson's study answers a critical question in health policy. It has been observed in recent years that HMO clients were using the hospital less often than people insured under fee-for-service plans, but some experts argued that HMO patients were simply healthier.

"Now we know that is not the explanation," said Robinson. "HMOs are changing the nature of health care.

"At the dawn of the 20th century, the hospital played only a peripheral role as a provider of last resort, while most medical services were delivered in the physician's office or the patient's home....Now, 100 years later, the pendulum is swinging back."

California's experience is being watched closely in other parts of the nation where medical care is also changing, but more slowly. In the United States as a whole, inpatient days declined by 21 percent during the decade, compared to 44 percent in the areas of California with the highest HMO use, Robinson found.

These reductions in hospital admission and length of stay were primarily responsible for the strong impact of HMOs in holding down medical inflation. Only a small impact on inflation was traceable to a decrease in the number of beds in the state.

Robinson expects that situation to be reversed in the future, with the strongest economic impact coming from reductions in beds.

The study also revealed major effects on psychiatric inpatient admissions, which declined even more sharply than did medical admissions. Inpatient days for psychiatric care dropped by 48 percent in areas of high HMO penetration, compared to a 13 percent increase in areas of low penetration.

Robinson's analysis does not include information about the impact of these changes on the quality of care being delivered, but he said that evaluation should be done.

"By definition, a time will come when too much is cut from hospital inpatient care," he said, "but I don't assume that more intensive hospital care is better for patients without the evidence to prove it."

Robinson also said that California will definitely see more hospital closures as bed capacity contracts to meet the decline in patient use. He predicted a consolidation in hospitals and hospital services.

The analysis included 350 hospitals in California, which account for about 90 percent of the total. It did not include Kaiser-Permanente hospitals or state, county or federal hospitals.


Copyright 1996, The Regents of the University of California.
Produced and maintained by the Office of Public Affairs at UC Berkeley.
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