City planners and policy experts are increasingly looking to for-profit businesses to serve as community-engaged institutions who stabilize the economic base of U.S. communities and bolster health and well-being [21, 22]. For-profit hospitals may be one example of businesses being successfully leveraged to improve local communities, but the current study findings suggest that one challenge to the prospect of for-profit hospitals serving as anchor institutions may be their stability and longevity in the communities they serve. For-profits are more likely than their counterparts to close or to merge, which indicates that, as an organizational type, they are less reliable to provide economic support over time to a community. Closures are a clear example of a way in which an organization may exit a community, taking with it a substantial number of jobs and other means of injecting money into a local economy. Beyond closures, this is important to consider in the case of mergers as well, since a merging hospital may find itself with a different identity or mission, potentially weakening its established community ties, or even with a reduced workforce. At the same time, for-profit hospitals tend to exist in areas with greater health needs [23]. These areas also face greater numbers of hospital closures and mergers overall, as our findings show. This combination of factors indicates that for-profit hospitals hold critical potential for strengthening local economies but may be limited by organizational characteristics that make them less stable in communities where there is also greater need.
It is perhaps unsurprising that for-profit hospitals, which by their nature have the purpose of generating revenue for shareholders, are more inclined to pursue business strategies such as closures or mergers when operation in a community no longer becomes financially advantageous. Yet, such strategies may be in conflict with a mission of serving a community’s well-being, forcing for-profit hospitals to reconcile their business decisions as a for-profit organization with the purpose they serve as a hospital. This may be further complicated by a decentralized decision-making structure that is common with for-profit hospitals that exist as part of a system; in such systems, headquarters that exist elsewhere and the executives who work there may not be plugged into the needs of a local community, making the consequences of an organization’s business strategies less apparent.
Departures of hospitals from rural communities have the potential to hit particularly hard in this way. One finding of our analysis portrays hospitals to be more stable in rural communities, which appears to counter recent literature on the topic. Considering this, we completed a post-hoc analysis to consider rural closure trends, which provide a clearer narrative [9]. While rural closures were less likely to occur when looking at the studied time period as a whole due to fewer occurrences as compared to non-rural communities in the early years of the study, we can see a clear trend in rural hospital closures increasing over time. For example, in 2010, .1% of rural hospitals closed, compared to .2% of nonrural; in 2016, .8% of rural hospitals closed, compared to .3% of nonrural (see Fig. 1). This is a phenomenon worth continued examination and study, particularly given the challenges it presents for rural communities both in regard to health and economic well-being.
Beyond institutional stability, another defining characteristic of anchor institutions is their propensity to employ large numbers of people [2, 24]. Again, study findings indicate that this is an area where a for-profit organization’s business strategies may result in less economic benefit for the community. Likely due to their emphasis on fiscal efficiency, for-profit hospitals employ fewer people than nonprofit hospitals of a comparable size. It is interesting that the employment numbers are more similar for clinical roles, which may point to accreditation or licensure standards that are applicable to all hospitals across ownership status or quality of care standards all hospitals would consider [25,26,27]. On the other hand, all types of hospitals may be facing consequences of a national nursing shortage and therefore find themselves unable to staff beyond certain levels [28].
Despite less stability and lower employment levels, for-profit businesses, including hospitals contribute to the local tax base which may support the economic health of their communities in ways not shared by private non-profit and public institutions. In both urban and rural communities where major institutions have left, for-profit hospitals may contribute to a shrinking tax base and provide critical support for community health and well-being. It is not clear, however, if these contributions are enough to offset other characteristics, such as the propensity to close, when weighing their economic contributions to U.S. communities. For-profit hospitals, like other businesses, may also make other contributions to their communities which are not measured in this study, including through health promotion and community development partnerships. This may include wellness programs among employees or extend to the community at large [29]. Indeed, the emphasis on social in addition to fiscal responsibility, is evident among some for-profit businesses and there may be potential to leverage such investments to improve the health of communities [21, 30]. Because of their size and influence, for-profit organizations, including hospitals, should not be discounted as potential anchor institutions, but more studies are needed to understand the extent and scope of their contributions in U.S. communities.
A recognition that for-profit hospitals have the potential to serve as anchor institutions should not be confused with an assumption that all for-profit hospitals have the desire or even willingness to take on this role and the greater community responsibility it may represent. Future studies are necessary to understand how for-profit hospitals define their role in population health improvement, including through traditional anchor activities like employment and procurement or through direct investments and community partnerships. Recent changes in reimbursement may encourage moving toward value from traditional fee-for-service models [31, 32], but whether these changes are influential in regard to anchor activities is still unknown. Policymakers should consider the potential role that for-profit hospitals may play in population health initiatives and what policies may activate investments in this area in the absence of formal community benefit responsibilities.