Hospital Mergers in Washington, 1986-2017, Study notes of Financial Management

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Washington State Health

Services Research Project

Research brief No. 105

Hospital Mergers in Washington

1986-

By Dan Bolton, Ph.D. March, 2022

Summary of our analysis

In the last three decades, hospital resources and care in Washington have become more concentrated as hospitals have closed or become part of multi-hospital systems:

• The percentage of hospitals in systems grew from 10% in 1986 to almost half in 2017
• The system hospital share of measures for resources and patient care grew from approximately 20% to values between 70% and 80%

One system, Swedish, was itself acquired by another system, Providence, in a process completed in 2012. These developments have increased the influence that hospital systems have on hospital care.

Introduction

This analysis surveys hospital organization trends in Washington, their effect on hospital resources, and on the availability of hospital care, using data from 1986-2017.

Hospitals are categorized as independent or part of a system. A “system” of hospitals is an organization that includes two or more hospitals. An “independent” hospital is not part of a system.

The state saw a succession of hospital mergers in recent years. These developments resemble

trends across the United States, with a notable surge since 2010 (Beaulieu et al., 2020). These events continue during good and bad economic times and have not been affected by the COVID- 19 pandemic (Rau, 2021). In 2017, 90% of hospital markets were defined as highly concentrated according to a standard measure used to assess competition, and previous years saw a marked increase in areas where a single system treats the majority of cases (Rau, 2021).

Reasons cited for the trend include beliefs that mergers strengthen hospital financial positions and that larger hospital systems represent more robust organizations (Dafny, 2021). Hospitals that struggle financially may pursue mergers as an alternative to possible closing. Public hospitals often face considerable financial pressures. One analyst questioned the viability of all public hospitals after a financially sound public hospital was sold to a non-public organization (Rau, 2021).

In the context of severe demands placed on hospitals by the COVID-19 pandemic, consolidation raises questions about whether concentrating resources in systems will affect hospitals’ ability to respond to extraordinary situations.

Common specific concerns about mergers relate to cost and quality of care. Although mergers are often heralded as opportunities to streamline operations and reduce patient care costs,

considerable research has found that mergers result in higher costs for patient care (Beaulieu et al., 2020; Singer, 2019; Dafny, 2021).

A 2021 article reported that, among rural hospitals, “merged hospitals were more likely than independent hospitals to eliminate maternal/neonatal and surgical care” (Henke et al., 2021). Studies have also found that mergers may lead to a “modestly worse patient experience” (Beaulieu et al., 2020) as well as reductions in patient satisfaction (Dafny, 2021).

Other factors also raise concerns. In Washington, the recent merger of a secular hospital system, Virginia Mason, with the Catholic health system CHI Franciscan prompted discussion about the impact of Catholic health care directives on patient care at hospitals that were previously not religiously affiliated. This topic is of national interest, as four of the top seven healthcare systems in the U.S. are Catholic (Meyer, 2020).

Methods

Mergers, consolidations, and closures of hospitals are tracked to identify trends over time. Measures of hospital resources and use include the numbers of beds and number of admissions in system and independent hospitals.

Data for this study come from the Department of Health (DOH) and the Office of Financial Management (OFM).

DOH annually collects data on hospital capacity and patient encounters from in-state hospitals. The data also reflect systems acquiring hospitals, since a hospital usually keeps the same license number when it joins or gets acquired by a new entity.^1 Media reports also track changes in hospital organizations.

(^1) License numbers may cease to be used after a merger of hospitals.

In comparing independent and system hospitals, this analysis focuses on numbers of acute care and intensive care unit (ICU) hospital beds, and hospital admissions. Although data are available for 1986-2020, in many cases complete data are available only through 2017.

OFM’s Forecasting and Research Division estimates state and county populations. These values are used to calculate measures by population.

Changes in hospital organizations

In 1986, Washington had three systems and 105 hospitals. Eleven hospitals, or 10%, were part of a system. By 2017, 10 systems included 45 of 98 hospitals in the state, or almost half. At the same time, systems acquired a proportion of certain hospital resources that was larger than their percentage of hospitals.

Most of these changes happened between 2006 and 2017. From 1986 through 2006 the percentage of hospitals in systems ranged between 10% and 13%, decreasing in some years. After 2006, the percentage began to rise.

Patient admissions to system hospitals offers dramatic evidence of change. In 1986 the three systems accounted for 20% of admissions. By 2017, that value had almost quadrupled, rising to 79%. Less dramatic but still striking changes happened in system percentages of available hospital beds, and ICU beds. In 1986, these measures ranged between 19% and 23%. By 2017, each measure had more than tripled.

Regardless of how mergers may affect provision of health care, the concentration of hospital

resources within systems suggests that organizational decisions and policies may strongly affect health care, possibly in ways that are difficult to predict.

Figure 1 displays the total number of hospitals (in blue) and the sum of hospital systems and independent hospitals (in green) counted together. Data in Figure 1 also appear in Table A in the Appendix.

For example, in 1986 there were 98 hospital organizations. Broken down, that included 95 independent hospitals and three systems with 11 hospitals.

Figure 1 highlights these trends. The number of organizations (the green circles below) went down as the number of hospitals remained steady, particularly after 2005.

Figure 1. Hospitals and hospital organizations, Washington 1986-

0

20

40

60

80

100

120

1985 1990 1995 2000 2005 2010 2015 2020

Counts

Year Number of hospitals Number of hospital organizations Source: Washington State Department of Health Community Hospital Year End Reports

Figure 2. Percentage of hospitals in systems, Washington 1986-

The decreasing total during the study period, from 98 to 63, reflects the trend of independent hospitals joining or being acquired by systems.

Approximately 10 hospitals closed without merging or being acquired. Reasons for closure varied, but they included financial difficulties, shifts from inpatient to outpatient care, aging physical facilities, and insufficient demand for services. The state closed two hospitals after it discovered unsafe conditions.

The percentage of hospitals in systems (Figure 2) also reflects changes during the study period. Data in Figure 2 also appear in Table A2 in the Appendix. As noted, the percentage grew from 10% in 1986 to 46% (almost half) in 2017. These values remained relatively steady from 1986 until 2006, ranging from 10% to 13%. After 2006, and particularly after 2010, the percentages climbed steadily.

The number of hospital organizations is the sum of independent hospitals and hospital systems. The percentage change of organizations gives us further perspective (see Table A2.1 in the Appendix). Negative values represent a decrease in the total number of hospital organizations, usually driven by mergers. It is again clear that the most dramatic period of change began in

In 1986, there were three systems in Washington, operating 11 hospitals in six counties (see Table 1): Franciscan Health System, with two hospitals in two counties; Providence, with seven hospitals in five counties; and the University of Washington, with two hospitals in one county. In following years, Franciscan joined Catholic Health Initiatives to form CHI Franciscan in 1996 and grew to nine hospitals by 2017. The University of Washington added two hospitals and Providence added six.

Table 1. Health care systems by counties and number of hospitals, Washington 1986 and 2017

Health Care System Counties 1986^

Number of hospitals 1986 Counties 2017^

Number of Hospitals 2017

Astria Yakima 3

Franciscan/CHIF

King 2

King Kitsap 9 Pierce Pierce

Confluence Chelan 2

Evergreen Health King 2 Snohomish

MultiCare

King Pierce 5 Spokane

PeaceHealth

Clark

Cowlitz San Juan Skagit Whatcom

Providence 7

Benton

King King Lewis Lewis Pierce Snohomish Snohomish Spokane Stevens Thurston Thurston Walla Walla Yakima

Skagit Regional Health

Skagit 2 Snohomish

University of Washington King 2 King 4

Virginia Mason

King 2 Yakima

Total 6 11 47

In 2017 there were 10 hospital systems. They grew across many dimensions: there were seven additional systems, 36 more hospitals in systems, and systems present in 11 additional counties— including some with smaller populations, which was less common in 1986. The systems not only grew but also extended their reach in Washington.

Hospital resources and

patient care

Beyond changes in organizations and direction, mergers affect availability and use of resources. These include the location of ICU and acute hospital beds, and patient admissions. This portion of the analysis compares resources in systems and independent hospitals and how Washingtonians use those resources.

The records furnish data to create four measures of hospital resources:

1. Hospital beds
2. Patient admissions
3. Admissions per available bed
4. ICU beds

Hospital beds

The number of available hospital beds per 100,000 population decreased from 298 to

170. The percentage of beds in hospital systems increased from 19% to 73%. A decreasing resource became increasingly concentrated in systems.

“Available” hospital beds are maintained and staffed for patient care. “Licensed” beds are the beds a hospital is authorized to provide (Washington State Department of Health, no date). However, the number of available beds is often lower than the number of licensed beds. The analysis considers available beds to compare hospital resources.

The number of hospital beds statewide provides important context for the impact of mergers. In 1986, Washington had more than 13, available beds. The number decreased to just under 11,200 in 2004 (see Figure 3; data in Figure 3 also appear in Table A3 in the Appendix). The count then began to increase, reaching 12,399 in 2017, but has not equaled the 1986 value.

Washington’s population grew as the number of beds fluctuated, so a more informative display presents the number of beds per 100, population (see Figure 4; data in Figure 4 also appear in Table A4 in the Appendix). These values steadily decrease, from 298 beds per 100,000 in 1986 to 170 in 2017.

As Washington’s population has grown, the number of available hospital beds available has decreased. Some of the change is attributable to the growing number of procedures performed in ambulatory surgical centers. The decrease in numbers, however, raises questions about hospitals’ ability to provide effective care when high demands are placed on resources.

Figure 5. Percentage of hospital beds and hospitals in systems, Washington 1986-

In 1986, the 11 system hospitals had 2, available beds, or 19% of the state total. By 2017, the 45 system hospitals had 9,079 beds, or 73% of the total (see Figure 5; data in Figure 5 also appear in Table A5 in the Appendix). This large shift in resources from independent to system hospitals creates more influence for systems in health care policy and administration.

There was slight variation from 1986-2000, with percentages in systems ranging between 19% and 22%. An increase from 2001-2006 produced values from 25% to 27%, and another, larger increase from 2007-2010, saw values from 38% to 40%. Percentages then rose from 53% in 2011 to 73% in 2017.

The pattern of increases in available beds from 1986 to 2000 resembled that for hospitals in systems, although percentages of beds in systems were always higher than percentages of hospitals. The 2001 increase was caused principally by Swedish Medical Center adding a location and becoming a system.

Figure 5 also presents the percentage of hospitals in systems (see also Figure 2). After 2000, the percentage of beds in systems climbed more steeply than the percentage of hospitals in systems. This suggests that hospital resources are becoming concentrated in systems more rapidly than hospitals.

Patient admissions

The percentage of patient admissions to system hospitals compared to independent hospitals rose from 20% to 79%.

Patient admissions to hospitals represent another metric of resource use: how much hospital care the population consumes during a year.

The trend in admissions to system hospitals (see Figure 6; data in figure 6 also appear in Table A in the Appendix) resembles the trend for hospital beds in systems discussed earlier (see Figure 5; data in Figure 5 also appear in Table A5 in the Appendix). Admissions to hospitals in systems increased slightly from 1986 through 2000. The percentage rose in 2001 and remained steady until 2006, when it rose again, then remained steady until 2010. From 2011, the percentage grew to 79% in 2017. These trends contrast with those for hospitals that are part of systems (Figure 2); data in figure 2 also appear in Table A in the Appendix). The percentage for admissions to system hospitals rose more rapidly in recent years than those for numbers of hospitals in

systems. This effect could be due partly to mergers happening among larger hospitals.

Admissions per available bed

Admissions per available bed increased for much of the period before starting to decrease, with the greater decrease happening in independent hospitals.

Beyond how many hospital beds are available, it is useful to explore how are they used over time. Rates for admissions per hospital bed reflect demand for beds. For this metric, results for independent and for system hospitals were roughly comparable from 1986 to 2009 (see Figure 7; data in Figure 7 also appear in Table A in the Appendix). After 2009, while system hospitals saw variation, values for independent hospitals began a steady decrease.

The combination of increasing admissions in system hospitals during the last 30 years and fewer in independent hospitals since 2009 further reflects a larger footprint for systems. A continued decline in admissions to independent hospitals could affect those hospitals’ long-term viability.

• Figure 3. Count of hospital beds, Washington 1986-
• Figure 4. Available hospital beds per 100,000 population, Washington 1986-
• Figure 6. Percentage of hospital admissions in systems, Washington 1986-
  • Figure 7. Admissions per available bed, Washington 1986-

ICU beds^2

The percentage of ICU beds found in system hospitals rose from 19% to 73%. This is much higher than the percentage of hospitals in systems, which is less than 50%.

Intensive care is defined as services that “require extraordinary observation and care on a concentrated exhaustive and continuous basis”

(Washington State Department of Health, no date). The COVID-19 pandemic placed severe demands on ICUs.

The percentage of ICU beds in systems (Figure 8; see also Table A8 in the Appendix) shows trends like those in hospital beds (Figure 5; see also Table A5 in the Appendix), and admissions (Figure 6; see also in Table A6 in the Appendix), but with more variation.

Figure 8. Percentage of ICU beds in systems, Washington 1986-

(^2) From 1986 to 1992, data for approximately 20 hospitals per year list “not reported” as the value for

the number of ICU beds. Most of these are rural hospitals that reported zero ICU beds in 2017.

The ICU bed percentage would be sensitive to system acquisition of hospitals with many ICU beds. By 2017, systems became major providers of intensive care and their policies would have an outsized influence in an emergency that included high demand for ICU resources.

Variation from 1996 to 1998 was due partly to small changes at several hospitals but also to one independent hospital that reported zero ICU beds in 1996, 1122 in 1997, and zero in 1998.

The year from 2006 to 2007 saw smaller variations in some hospitals but also an expansion of the Providence system, which went from three to eight hospitals. The new Providence hospitals had been independent, so their ICU beds were newly added to the system total in 2007.

County level impacts

In 1986, systems operated hospitals in six counties with 60% of the state population. Each of these counties was home to at least one independent hospital. Twenty-nine counties, with 39% of the population, were served only by independent hospitals. Four counties had no hospitals.

In 2017, systems operated hospitals in 17 counties. Eight, almost half, of those counties were served only by system-operated hospitals. Close to 90% of the population lived in a county with at least one system hospital, compared to 60% in 1986. These values suggest that systems have increased their influence.

Nineteen counties, with 11% of the state population, were served only by independent hospitals in 2017. All 19 are classified as rural (Sales and use tax for public facilities in rural counties, 1997 and revised 2012; Office of Financial Management, 2021).

Counties with only system hospitals

In 1986, there was no county where a system or systems operated all hospitals. However, in 2017, there were eight:

1. Clark
2. Cowlitz
3. Kitsap
4. San Juan
5. Stevens
6. Walla Walla
7. Whatcom
8. Yakima

These counties had a combined population of 1,432,920, representing almost 20% of the state.

Counties where a single system had

more than half of available beds in 2017

In 1986 there were two counties, Lewis and Thurston, where a single system had almost half or more than half of available hospital beds. In 2017, there were fourteen counties where a single system had more than half of available hospital beds (see Table 2).

Two other county statistics from 2017 deserve mention. Pierce County appears in Table 2 because MultiCare has 52% of available beds in the county. However, MultiCare and CHIF together have more than 90% of available beds in Pierce County. PeaceHealth has all available beds in Cowlitz County and a large percentage in Clark County; in those counties combined, PeaceHealth has 73.5% of beds. Among Washington counties, Pierce ranks second in population, Clark ranks fifth, and Clark and Cowlitz as one county would rank fourth. These measures are examples of populous counties or regions where a limited number of systems dominates available beds.

By contrast, systems in King County have 74% of available beds but those beds are in six systems. It is not surprising that residents in sparsely populated areas have limited choices for hospital

care, but that is also true for some regions, like Pierce County, with comparatively large populations.

Table 2. Counties where a single system had more than half of available hospital beds, 2017

Health Care System

County CHIF^3 Confluence MultiCare PeaceHealth Providence

Skagit Regional Health

Virginia Mason

Benton 66% Chelan 86.5% Clark 66% Cowlitz 100% Kitsap 100% Lewis 80.2% Pierce 52% San Juan 100% Skagit 67% Snohomish 81% Spokane 60% Stevens 100% Thurston 76% Walla Walla 100% Whatcom 100% Yakima 52.4%

Critical access hospitals

The Centers for Medicare and Medicaid Services designate some hospitals as critical access hospitals (“CAH”; Medicare Learning Network, 2021). CAHs are usually found in rural areas and have other characteristics in common. These include:

• No more than 25 acute care inpatient beds
• Round-the-clock emergency care

(^3) Franciscan Health System became known as CHI Franciscan in 2014 as part of a rebranding by its parent organization, Catholic Health Initiatives.

• Must usually be located more than 35 miles from any other CAH or hospital
• Acute care patients have an average annual length of stay of no more than 96 hours

The CAH designation was intended to promote continuing access to health care in rural communities. CAHs receive certain benefits related to cost reimbursement, staffing and services, and access to other resources.

Washington has 39 CAHs (Washington State Rural Health Plan, 2020). Of these, six (15.4%) belonged to systems in 2017.

Counties with one hospital in 2017

As of 2017, 15 Washington counties have one hospital (Table 3). Of these, five belong to a system and 10 are independent. These

counties had a combined population of 1,026,510, or just under one out of seven in the statewide population.

In 1986, almost 13% of state residents lived in counties with one hospital that was not part of a system. By 2017, this value had decreased to 5%.

In six counties, the single hospital is a CAH.

Table 3. Washington counties with one hospital, 2017

County Hospital System Critical Access Hospital Asotin Tri-State Memorial Hospital Columbia Dayton General Hospital Cowlitz PeaceHealth St John Medical Center PeaceHealth Ferry Ferry County Memorial Hospital Yes Franklin Lourdes Medical Center Garfield Garfield County Memorial Hospital Island Whidbey Health Medical Center Yes Jefferson Jefferson Healthcare Yes Kitsap Harrison Medical Center CHIF Kittitas Kittitas Valley Healthcare Yes Mason Mason General Hospital Yes Pend Oreille Newport Hospital and Health Services Yes San Juan PeaceHealth Peace Island Medical Center PeaceHealth Walla Walla Providence St Mary Medical Center Providence Whatcom PeaceHealth St Joseph Medical Center PeaceHealth

Counties with no hospital in 2017

In 1986, four Washington counties had no hospitals:

1. Douglas
2. San Juan
3. Skamania
4. Wahkiakum

That year, the counties had a combined population of 44,082, just under 1% of the state. In 2012, PeaceHealth Peace Island Medical Center opened in San Juan County with 10

available beds. None of the other three counties had a hospital by 2017. Their combined population was 57,140, or 0.78% of the state population.

Residents of the remaining three counties with no hospital must travel to another county for care. From an approximately central location in each county, travel times to a hospital may vary from 35 to 45 minutes to one hour or longer. The nearest hospital would often be a rural facility or critical access

hospital with limited services and patients would make the trip over sometimes challenging routes.

Religiously affiliated hospital

systems

Catholic health care systems are prominent nationwide and have developed a strong presence in Washington. In recent years, Catholic hospitals have increased their share of hospitals and resources among all hospitals but decreased their share among all system hospitals.

Growth in Catholic systems has caused concern among commentators and advocates who note that the directives that guide the provision of health care in Catholic settings ( Ethical and religious directives for Catholic health care services, 2018) address issues related to end-of- life and reproductive health care. The directives may affect patient access to specific procedures or categories of care. The data used for this study do not measure access to these services. While the analysis provides context, it does not address specific information about access or use.

Figure 9. Catholic hospitals among all hospitals and system hospitals, Washington 1986-

Changes in metrics for Catholic hospitals reflect organizational changes in Catholic and non- Catholic hospital systems. A consistent theme is that the percentage of system resources in Catholic systems grew in earlier years, but that changed recently as secular systems expanded.

During the study period, the percentage of Catholic hospitals among all hospitals grew from less than 10% to more than 25%. Among system hospitals, the percentage rose as high as 91% during the late 1990s but decreased to 58% by 2017 (Figure 9; data in Figure 9 also appear in Table A9 in the Appendix). Four Washington

counties—Cowlitz, San Juan, Stevens, and Whatcom—are served only by Catholic-affiliated hospitals.

The measures used above for all system and independent hospitals will be used here to examine trends among Catholic-affiliated hospitals.

The percentage of beds in Catholic hospitals increased among all hospitals, especially after 2006, but was more variable in the context of system hospitals (Figure 10; data in Figure 10 also appear in Table A10 in the Appendix).

Figure 10. Beds in Catholic hospitals among all hospitals and system hospitals, Washington 1986-

The percentage of admissions to Catholic hospitals resembles the trends seen in available hospital beds (Figure 11; data in Figure 11 also appear in Table A11 in the Appendix). After 2000, the percentage among system hospitals saw some increases but also decreases, particularly after 2011.

Admissions per bed among independent hospitals, non-Catholic system hospitals, and Catholic hospitals follow roughly similar trends: a steady increase from 1986 through 2004 (Catholic hospitals) or through 2008-2009 (all other hospitals), followed by a noticeable decrease (Figure 12; data in Figure 12 also

appear in Table A12 in the Appendix). Catholic hospitals usually have the highest number of admissions per bed, while independent and other system hospitals vary in which has the

lowest number. Independent hospitals have had the lowest number of admissions per bed since 2013, with that value decreasing each year.

Figure 11. Admissions to Catholic hospitals among all hospitals and system hospitals, Washington 1986-

Figure 12. Admissions per bed in independent, non-Catholic system, and Catholic hospitals, Washington 1986-

ICU beds in Catholic hospitals present more varied patterns in comparison with other hospitals (Figure 13; see also Table A13 in the Appendix). Both percentages were steady until about 1996. Since then, the Catholic percentage of ICU beds among all hospitals remained steady until 2006, when it began to trend up, reaching

its highest value in 2015. The percentage among system hospitals dropped in 2001, when Swedish became a system, and then followed a series of plateaus that generally increased until 2016. After this time, MultiCare expanded and Virginia Mason and Atria became systems.

Figure 13. ICU beds in Catholic hospitals among all hospitals and system hospitals, Washington 1986-

Hospitals leaving systems and

future developments

Some hospitals left systems during the study period. Yakima Regional Medical Center was part of the Providence system in 1986, left Providence in 2004, and joined Astria in 2017 to become Astria Regional Medical Center. Yakima Valley Memorial Hospital joined Virginia Mason in 2016, becoming Virginia Mason Memorial. However, in 2020, Virginia Mason Memorial’s board of directors voted to end the relationship with Virginia Mason Franciscan and become independent. A healthcare industry analyst suggested that decision was motivated in part by concern about providing reproductive services in a Catholic healthcare system (Kacik, 2021a).

The process of unwinding mergers can be complex (Kacik, 2021a). Motivations may include post-merger experiences that differ from what

parties expected, different organizational approaches to health care, and unexpected outcomes for expenses. Mergers are often promoted as a path to create synergy and improve efficiency, but this is not necessarily supported by real world experience or relevant research.

Meanwhile, mergers continue nationwide and in Washington. In 2021, CHI Franciscan merged with Virginia Mason to form Virginia Mason Franciscan Health. An August 2021 national news report discussed a “tidal wave” of merger applications to the Federal Trade Commission, amid suggestions that proposed mergers may face heightened scrutiny in the future (Kacik, 2021b). States and the federal government have taken different perspectives on antitrust issues in hospital mergers. Consolidation trends will likely continue although the regulatory picture is uncertain.

Table 4. Summary of system hospital measures, 1986 and 2017

1986 2017 Total count of independent hospitals and systems

Counties with system hospitals 6 17 Hospitals in systems 10% 46% Beds in systems 19% 73% Admissions to systems 20% 79% ICU beds in systems 21% 73%

Conclusion

Hospital mergers affect hospital resources — such as available beds and affiliation with other hospitals — and patient care, reflected in number of patient admissions. Overall, the data show that in the last three decades resources and care in Washington became concentrated as hospitals closed or became part of systems.

Table 4 presents a summary comparison of measures related to system hospitals in 1986 and 2017. The number of hospitals in systems grew from 10% to almost half. More dramatically, the system hospital share of resources and care grew from approximately 20% in each case to more than 70% and for some measures close to 80%.

Systems in the late 2010s had a greater say in how health care is administered and delivered, including in emergency situations. It remains to be seen how the growing influence of hospital systems and differing health care philosophies among organizations will affect Washingtonians. If patient experiences after hospital mergers in Washington are similar to those reported in literature, then the concentration of resources and care may result in higher costs for less satisfactory patient care.

Limitations The analysis is subject to any limitations in the DOH datasets, including data quality issues and missing data. Hospitals that are part of the Military Health System and the Veterans Health Administration do not report to DOH, so metrics do not reflect resources in those facilities.

Transition during this period from inpatient to ambulatory surgery center procedures may have suggested to hospital planners and managers that Washingtonians needed fewer hospital resources than in previous years. The pandemic experience of 2020 demonstrates that unforeseen situations may rapidly and significantly affect demand for hospital resources.

Data on resources for residents who live near state boundaries may be incomplete. Some health systems provide hospital care in both Washington and Oregon, or Washington and Idaho. This cross-boundary presence means patients may obtain health care on either side of the state line. The DOH data analyzed here do not include information on hospitals outside Washington.

References

Beaulieu, N. D., Dafny, L. S., Landon, B. E., Dalton, J. B., Kuye, I. and McWilliams, J. M. (2020). Changes in quality of care after hospital mergers and acquisitions. New England Journal of Medicine , 382:51-59. DOI: 10.1056/NEJMsa1901383. https://www.nejm.org/doi/full/10.1056/NEJMsa1901383

Dafny, L. (2021). Addressing consolidation in health care markets. Journal of the American Medical Association. 325(10):927-928, doi:10.1001/jama.2021.0038. https://jamanetwork.com/journals/jama/article-abstract/2776037

Ethical and religious directives for Catholic health care services. (2018, 6 th^ ed.). United States Conference of Catholic Bishops. https://www.usccb.org/about/doctrine/ethical-and-religious- directives/upload/ethical-religious-directives-catholic-health-service-sixth-edition-2016-06.pdf

Henke, R. M., Fingar, K. R., Jiang, H. J., Liang L. and Gibson, T. B. (2021). Access to obstetric, behavioral health, and surgical inpatient services after hospital mergers in rural areas. Health Affairs, 40, No. 10 (2021): 1627-1636. DOI: 10.1377/hlthaff.2021.00160. https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2021.00160

Kacik, A. (2021a, June 8). Consolidation casualties: hospital mergers unwind as organization clash. Modern Healthcare. https://www.modernhealthcare.com/mergers-acquisitions/consolidation-casualties-hospital- mergers-unwind-organizations- clash?adobe_mc=MCMID%3D63405112503259269763458098890884432926%7CMCORGID%3D138FFF2 554E6E7220A4C98C6%2540AdobeOrg%7CTS%3D1631142798&CSAuthResp=1%3A%3A954906%3A0%3A 24%3Asuccess%3ABDC3A27E020979FA5BB6E0AD87BC768B

Kacik, A. (2021b, August 4). Feds hit with “tidal wave” of merger filings. Modern Healthcare. https://www.modernhealthcare.com/mergers-acquisitions/feds-hit-tidal-wave-merger-filings

Medicare Learning Network. (2021). Critical Access Hospital (MLN006400 March 2021). Centers for Medicare and Medicaid Services. https://www.cms.gov/Outreach-and-Education/Medicare-Learning- Network-MLN/MLNProducts/Downloads/CritAccessHospfctsht.pdf

Meyer, H. (2020). Hospital merger in Washington State stokes fears about Catholic limits on care. Kaiser Health Network. https://khn.org/news/hospital-merger-in-washington-state-stokes-fears-about-catholic- limits-on-care/

Office of Financial Management. (2021, June 30). Population density and land area criteria used for rural area assistance and other programs. https://ofm.wa.gov/washington-data-research/population- demographics/population-estimates/population-density/population-density-and-land-area-criteria-used- rural-area-assistance-and-other-programs

Rau, J. (2021, January 29). If this self-sufficient hospital cannot stand alone, can any public hospital survive? Kaiser Health Network. https://khn.org/news/article/if-this-self-sufficient-hospital-cannot-stand- alone-can-any-public-hospital-survive/

Sales and use tax for public facilities in rural counties, RCW 82.14.370 (1997 and revised 2012). https://apps.leg.wa.gov/rcw/default.aspx?cite=82.14.370

Singer, L. E. (2019). Considering the ACA’s impact on hospital and physician consolidation. The Journal of Law, Medicine and Ethics. Vol. 46, Issue 4, 2018. https://journals.sagepub.com/doi/10.1177/1073110518821989

Washington State Department of Health. (No date). Glossary of hospital financial terms. https://www.doh.wa.gov/DataandStatisticalReports/HealthCareinWashington/HospitalandPatientData/Gl ossary

Washington State Rural Health Plan. (2020). Critical Access Hospital (CAH) Program (DOH Publication Number: 609-012 June 2020). Washington State Department of Health. https://www.doh.wa.gov/Portals/1/Documents/2900/609012-CAHlist-RuralHealth.pdf

Appendix

The Appendix uses tables to present data that appear in graphical form in the main text.

Table A1. Sum of independent hospitals and hospital systems, 1986-2017

Year Number of hospitals

Number of hospital organizations

1986 106 98 1987 103 95 1988 100 92 1989 97 89 1990 94 86 1991 95 86 1992 94 85 1993 91 82 1994 90 81 1995 93 85 1996 93 85 1997 92 84 1998 92 84 1999 92 84 2000 92 84 2001 93 85 2002 95 87 2003 95 87 2004 96 90 2005 96 90 2006 96 90 2007 95 82 2008 96 83 2009 95 81 2010 95 81 2011 95 75 2012 97 74 2013 98 72 2014 99 71 2015 100 71 2016 102 72 2017 98 63

Table A2. Percentage of hospitals in systems, 1986-2017

Year

Percentage of hospitals in systems 1986 10.5 1987 10.8 1988 11.1 1989 11.5 1990 11.8 1991 12.8 1992 12.9 1993 13.3 1994 13.5 1995 12.0 1996 12.0 1997 12.1 1998 12.1 1999 12.1 2000 12.1 2001 12.9 2002 12.6 2003 12.6 2004 10.4 2005 10.4 2006 10.4 2007 18.9 2008 18.8 2009 20.0 2010 20.0 2011 27.4 2012 28.9 2013 32.7 2014 35.4 2015 36.0 2016 37.3 2017 45.9

Table A2.1. Annual percentage change in number of hospital organizations, 1987-2017

Year

Percentage change in number of organizations 1987 - 3.1 1988 - 3.2 1989 - 3.3 1990 - 3.4 1991 0.0 1992 - 1.2 1993 - 3.5 1994 - 1.2 1995 4.9 1996 0.0 1997 - 1.2 1998 0.0 1999 0.0 2000 0.0 2001 1.2 2002 2.4 2003 0.0 2004 3.4 2005 0.0 2006 0.0 2007 - 8.9 2008 1.2 2009 - 2.4 2010 0.0 2011 - 7.4 2012 - 1.3 2013 - 2.7 2014 - 1.4 2015 0.0 2016 1.4 2017 - 12.5