Managed Care Timeline: Hospital Closures and Payment Reform
This paper presents a chronological timeline documenting the effects of managed care on the U.S. hospital system from the early 1980s through 2016. It traces the correlation between managed care concentration and hospital consolidation in major metropolitan areas, the decline in emergency departments, and specific hospital closures attributed to managed care reimbursement pressures. The timeline also covers the rise of specialty hospitals designed to avoid EMTALA obligations, and follows the evolution of bundled payment initiatives — from the PROMETHEUS Payment project and CMS quality measures through provisions in the Affordable Care Act and Medicare pilot programs. The paper concludes that managed care contributed to significant contraction of hospital capacity over several decades.
- Overview of Managed Care and Hospital Consolidation: Managed care concentration linked to hospital consolidation
- Emergency Department Decline and EMTALA: ED closures and federal EMTALA access requirements
- Hospital Closures Linked to Managed Care: Specific hospitals closed due to reimbursement pressures
- Rise of Specialty Hospitals and EMTALA Avoidance: Specialty hospitals bypassing emergency care obligations
- Bundled Payment Initiatives and Policy Reform: PROMETHEUS, CMS, and ACA bundled payment evolution
- Conclusion: Managed care caused decades of hospital capacity contraction
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What makes this paper effective
- The chronological timeline format makes complex, multi-decade policy shifts easy to follow and compare across time periods.
- Specific data points — such as the drop from 4,908 to 4,045 emergency departments — ground abstract policy arguments in measurable outcomes.
- Named hospital closures with stated causes (e.g., exclusion from managed care plans, weak reimbursements) provide concrete evidence for broader systemic claims.
Key academic technique demonstrated
This paper uses a documentary timeline as an evidence structure, allowing each entry to function as a data point in a cumulative argument about managed care's impact. Rather than relying solely on prose argument, the author builds a case through sequential, sourced facts — a technique common in health policy and public administration writing.
Structure breakdown
The paper opens with statistical background on hospital concentration and managed care, then moves through a series of dated entries documenting emergency department closures, specific hospital shutdowns, and the emergence of specialty hospitals. The second half pivots to payment reform policy, tracing bundled payment development from 2007 through 2016. A brief conclusion synthesizes the trend, supported by a small set of academic and trade references.
Overview of Managed Care and Hospital Consolidation
The change in hospital concentration across 68 large metropolitan statistical areas (MSAs) between 1981 and 1994 is positively correlated with the level of managed care concentration in 1993 and 1994. This relationship suggests that rising managed care market power during this period drove significant structural changes in how hospitals operated and consolidated across the United States (Town, Wholey, Feldman & Burns, 2007).
Emergency Department Decline and EMTALA
Congress enacted the Emergency Medical Treatment and Labor Act (EMTALA) to ensure public access to emergency services regardless of a patient's ability to pay. At its peak, 4,908 hospitals in the United States operated emergency departments. However, crowded emergency departments emerged in part because state and federal governments were not providing sufficient support to public hospitals. According to figures provided by the American Hospital Association, nearly 18% of hospitals with emergency departments — approximately one in five — were shut down. By 2001, only 4,045 hospitals in the United States still had emergency departments, representing a decline of 863 facilities.
Hospital Closures Linked to Managed Care
Several specific hospital closures during the early 2000s illustrate the direct impact of managed care reimbursement pressures on hospital viability. In 2002, Emory Parkway Medical Center in Atlanta, Georgia, closed after 28 years of operation, having been excluded from participation in certain managed care plans. That same year, another facility closed due to weak managed care reimbursements. In 2003, Caledonian Hospital in Brooklyn, New York, closed after 93 years, with hospital officials citing underutilization of the facility.
Conclusion
Hospital capacity contracted significantly over the past several decades. Managed care representatives argue that hospitals in the United States were "over-bedded" during that time. The reduced need for inpatient hospital capacity has been attributed to "technological developments, declining lengths of stay, and more use of convenient outpatient surgery centers" (Glabman, 2003).
References
____. (2012, December). Trends in nursing facility characteristics. American Health Care Association Reimbursement and Research Department.
Glabman, M. (2003, June). Managed care makes it tough for some hospitals to stay afloat. Managed Care. Retrieved from
Town, R. J., Wholey, D., Feldman, R., & Burns, L. R. (2007). Revisiting the relationship between managed care and hospital consolidation. Health Services Research, 42(1 Pt 1), 219–238. doi:10.1111/j.1475-6773.2006.00601.x Retrieved from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1955242/
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