NCPA - National Center for Policy Analysis

Hospitals Embark on Expansion Frenzy

February 20, 2002

In high-growth and no-growth areas alike, hospitals across the country are reportedly in a race to build specialized centers and expand medical services. Hospital administrators claim they are only getting ready to satisfy the needs of aging baby-boomers. Some others say good old-fashioned competition is behind the trend.

Some critics fear the quality of patient care will suffer as ever more complex procedures are offered by inexperienced or low-volume hospitals. The medical arms race also threatens to push already rapidly rising health care costs higher, critics say, by duplicating services and encouraging overuse.

  • Some 44 percent of 43 hospitals surveyed in a 12-city tracking effort are building specialty care centers.
  • The expansions include all manner of services and equipment -- specialized orthopedic centers, weight loss programs, cancer and especially cardiac surgery centers, to name a few.
  • Analysts say the trend could ultimately reshape the hospital system in some cities -- from one made up of all-purpose facilities to a system of competing specialty hospitals.
  • With about 1.4 million Americans having either coronary bypass surgery or angioplasty a year -- at a cost of $115 billion annually for hospital care, doctor bills and drugs -- cardiac surgery centers are by far the most popular expansion at present.

In 1990, almost 17 percent of hospitals had open-heart surgery programs. As of 2000, nearly 22 percent -- or 913 facilities -- had them. Experts estimate that by the end of last year the number had topped 1,000.

Source: Julie Appleby, "Hospitals Fight for Turf in Medical Arms Race," USA Today, February 20, 2002.


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