Carlson School of Management
Twin Cities
This study examines the impact of hospital unit closures on the financial performance of nearby hospitals. Recent published papers have addressed the impact of entire hospital closures and their effects on patient health outcomes. A few studies have examined this impact on operational performance, such as efficiency or nurse staffing utilization. A handful of studies have also investigated hospital specialized unit closure such as obstetric units or cancer units, and the impact on patient health outcomes.
In contrast, this study examines the relationship between hospital unit closures and financial performance of nearby hospitals that continue operating near the affected service unit. The researchers expect that closing a unit will negatively impact the financial performance of proximal units. Specifically, they explore the moderating role of two operational levers - focus and resource redeployment strategies - in mitigating the potential negative impacts. To empirically investigate the relationships, this study employs a quasi-experimental design using a difference-in-differences analysis, leveraging patient-level claims data from 222 hospitals in the State of New York, spanning 2013 to 2020.