The geography of urban health care delivery in the United States : locational changes incurred by nonprofit hospitals since the implementation of Medicare

This research explores the locational ramifications of government health care policies by focusing on urban nonprofit hospitals since the implementation of Medicare in the mid 1960s. Three hypotheses are tested: (1) instead of suburban relocation of their central city facilities, urban nonprofit hospitals have formed provider networks, especially locally based multi-hospital systems, to expand the geographic scope of their market share; (2) government health care policies, especially Medicare and related legislation, are the major causes for the growth of locally based multi-hospital systems; and, (3) locally based multi-hospital systems are responsible for reducing both duplicated services and access to care for the poor.

Changes in location and affiliation of general hospitals are documented in forty-two sampled cities. Fort Sanders Health System in Knoxville, Tennessee, is offered as a case study. Findings, in general, confirm the first two hypotheses: (1) most urban nonprofit hospitals in the sampled cities did not succeed in outright suburban relocation; instead, they have used suburban satellite branches and locally based multi-hospital systems to expand their suburban and regional customer bases; (2) several pieces of federal regulation regarding health care delivery, especially Medicare, certificate of needs (CON) laws, and prospective payment systems (PPS), have been most responsible for the specific locational changes of hospital service delivery. Empirical evidence did not, however, support the hypothesis that the growth of locally based multi-hospital systems has reduced service duplication but worsened service access for the poor. This research is a contribution to locational theories of nonprofit institutions and the geography of health care delivery.