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A. Hospitals: Casualties of Managed Care

Narrator: This is Science Today. One of the casualties of the health care revolution has been your local hospital. Health economist James Robinson of the University of California, Berkeley says that managed care is leading to shorter hospital stays and more outpatient treatment. In California, hospitals are closing -- and that state is leading a national trend.

Robinson: In the past decade, about 20 percent of hospitals in California have closed down. The remaining hospitals are only about half full. The decline in hospital utilization has been so dramatic that we now have a very serious excess capacity, and I predict that there will be further closures of hospitals.

Narrator: Often, a for-profit hospital chain will buy a non-profit chain and close parts of it down.

Robinson: Usually they do that in those instances where the non-profits are going broke. Non-profits are not adjusting well to the new environment. The new environment says reduce your costs, the non-profits are not good at that. And the for-profits are better at that, frankly. So I do believe we will see a continued growth of the for-profit sector at the expense of the non-profit sector.

Narrator: For Science Today, I'm Steve Tokar.