Why One-third of Hospitals Will Close by 2020

Despite a history of strength and stature in America, the hospital institution is in the midst of massive and disruptive change. Such change will be so transformational that by 2020 one in three hospitals will close or reorganize into an entirely different type of health care service provider. Several significant forces and factors are driving this inevitable and historical shift.

First, America must bring down its crippling health care costs. The average American worker costs their employer $12,000 annually for health care benefits and this figure is increasing more than 10 percent every year. U.S. businesses cannot compete in a globally competitive market place at this level of spending. Federal and state budgets are getting crushed by the costs of health care entitlement programs, such as Medicare and Medicaid. Given this cost problem, hospitals are vulnerable as they are generally regarded as the most expensive part of the delivery system for health care in America.

Second, statistically speaking hospitals are just about the most dangerous places to be in the United States. Three times as many people die every year due to medical errors in hospitals as die on our highways — 100,000 deaths compared to 34,000. The Journal of the American Medical Association reports that nearly 100,000 people die annually in hospitals from medical errors. Of this group, 80,000 die from hospital acquired infections, many of which can be prevented. Given the above number of admissions that means that 1 out of every 370 people admitted to a hospital dies due to medical errors. So hospitals are very dangerous places...