How do money and power influence the financial sustainability of urban hospitals?

It is important to examine the forces that influence urban hospital financial sustainability and survival because nearly 250 million Americans rely on these hospitals. The COVID-19 pandemic magnified financial pressures on urban hospitals, especially those in low-income areas and communities of color, raising their risk of closing, and jeopardizing access for their patients. Most studies of the financial sustainability and survival of urban U.S. hospitals were conducted during the 1970s through the 1990s. They focused on various economic forces influencing a hospital’s financial sustainability and survival over time and across space (cities and states). Few studies have examined these forces in the last twenty years. Even fewer have considered political influences on hospital sustainability . Using a modified Resource Dependence Theory (an organizational survival theory), one that adds sociodemographic and political constructs, this study updates the literature by pursuing three aims. Aim 1 is a cross-sectional study that examines predictors of common measures of financial sustainability, using 2019 American Hospital Directory financial data that abstract hospitals’ Medicare Cost Reports. This is the most recent year available. Aim 2 uses these data to evaluate inter-state differences in hospital financial performance. It separately examines hospitals in states with high and low financially performing hospitals. Aim 3 uses longitudinal comparative case studies to examine pairs of financially distressed urban hospitals in three metropolitan areas with high hospital closure rates. Each city pair consists of one closed hospital and one surviving hospital. Findings suggest that political forces and public interventions are as important as financial pressures in shaping the sustainability and survival of urban hospitals. This study is useful in three ways. First, it updates the evidence on hospital financial sustainability and survival. Second, it guides the development of new policies to protect needed hospitals in several states. Third, it points toward ways to support equitable access to health care