- Bay Area Regional Medical Center says it will shut its doors Thursday and file for bankruptcy.
- The 191-bed hospital, which opened in July 2014, invested $200 million over the past five years on construction and operations.
- The closure leaves an estimated 900 employees without jobs, according to Fox 26. It also necessitates the transfer or discharge of 115 patients.
The news reflects the struggles many hospitals face to remain solvent in today’s changing healthcare environment. As reimbursement cuts push more patients to outpatient care delivery settings, hospital volumes are shrinking, and with them, hospital revenues.
In January, Premier Health announced it would close its Good Samaritan Hospital in Dayton, Ohio, by year’s end and consolidate services in nearby Miami Valley Hospital. Other recent closures include Kindred Hospital Kansas City, a long-term acute care facility, and Care New England’s Memorial Hospital in Pawtucket, Rhode Island.
Memorial’s story mirrored that of many hospitals and health systems today. The 294-bed hospital’s daily inpatient census had fallen to 15 to 20 patients, leading to an operating loss of $23 million.
Bay Area Regional spokesman Santiago Mendoza told Healthcare Dive the hospital had no trouble filling beds but was unable to secure affordable managed care contracts with insurers when the contract came up for renewal.
Situated midway between downtown Houston and Galveston Island, Bay Area Regional’s closure should not have a major effect on access to care. There are seven or eight other hospitals within 10 to 15 miles of BARMC.
The situation is worse in rural areas where a hospital’s closure can leave communities without access to basic services like emergency department and obstetrics care. Since 2005, more than 120 rural hospitals have closed and 673 more are on shaky financial ground and could close, according to the National Rural Health Association.