Potential Project Description for 2011-12


Title: Evaluating the Cause and Impact of Hospital Closings
Domain Expert: Ashley Hodgson (Economics)

As financial pressures in the health care industry mount, hospital closings have become more commonplace than many believe is optimal. Sometimes this amounts to an entire hospital shutting its doors; other times a hospital will simply shut down a department within the hospital that is consistently losing money. Emergency departments are particularly vulnerable.

In this project, we would investigate the cause of hospital closings by looking at the impact of these closings on surrounding hospitals. One hypothesis is that these hospitals are closing because of poor management. An alternative hypothesis as that these hospitals are treating the least profitable patients (the poorest, the sickest and patients with illnesses that are not generally well-reimbursed by insurers). If the former is true, surrounding hospitals may benefit from hospital closings by accruing a larger market share. If the latter is true, hospital closings will place a financial burden on other hospitals in the surrounding region. The implications of this project could inform policymakers who are concerned with the stability of the health care system going forward.

The data set for this project is a 10-year comprehensive data of all hospitals in the state of California, including individual patient diagnosis and treatment information as well as hospital financial data (data comes from the Office of Statewide Health Planning and Development, OSHPD).

Key steps in this project:

1) Identifying relevant hospital closings in California between 2001 and 2010 and researching potential key factors leading to the hospital closing (this can be done both by mining the data and also by searching news articles near the time of the closing).

2) Identifying substitute hospitals by looking at patient zip code information

3) Using differences-in-differences to evaluate the impact of the hospital closings on various key statistics within substitute hospitals.