I think Hailin (and other posters) are absolutely right in trying to determine the cause for the decrease in the number of public hospitals before speculating on whether the trend is good or bad. After all, it would not be a tragedy for public hospitals to close if the demand for them decreases. On the other hand, if public hospitals are truly in short supply, and cannot be replaced by urgent care centers or community clinics, then the only way to reverse this trend is to understand what's driving it.
This is clearly a complicated issue on which (I'm sure) hundreds of academic papers have been written, but I think it's safe to say that one of major causes of the decline is the enormous pressure on local, state, and federal governments to contain the rising costs of healthcare.
Let's consider the hypothetical situation of some generic public hospital, called Hospital X.
Hospital X serves a population of 100 patients. These patients have varying degrees of health: some are only occasional outpatients, while others only ever grace the ED, and still others have serious conditions that require hospitalization. Most patients are able to pay, but some are not. State and federal dollars (that is, tax dollars) comprise the bulk of Hospital X's budget.
Now, let's say the state government decides that it needs to increase access to care for its underserved and uninsured population (we'll pretend it's a surplus year for the state budget). It does so by offering higher reimbursement rates or other incentives for Medicare and Medicaid patients (or those on other government programs). This is good news for healthcare providers everywhere. Hospital X predicts that it will generate more revenue, and therefore become a more sustainable institution. However, the private sector also realizes that taking on these Medicare and Medicaid patients is not as bad as it used to be. They begin to dip into Hospital X's health consumer pool, and draw away some of the patients that normally go to Hospital X for their care.
As far as the patients are concerned, this is not a bad development. In fact, this shift from public to private healthcare is not necessarily a bad development overall, so long as private care is reasonably accessible and reasonably affordable.
Crucially, however, the private sector does not take on all of Hospital X's patients. It only takes those that are insured (by government programs or otherwise) or have some other means to pay. Let's say 60 of Hospital X's original 100 patients are of this type. This leaves Hospital X with 40 patients who are 1) the sickest of all the patients, therefore requiring the most intensive and expensive interventions; and 2) the poorest of all the patients, therefore unable to pay for those intensive and expensive services.
However, Hospital X is required by law to treat these 40 patients, who now largely enter Hospital X through its emergency department rather than its outpatient clinic. Consequently, they are sicker than before, because they have waited until the last possible moment to get care.
Clearly, this is not financially viable. But it gets worse: now some employers stop offering health coverage to their employees, and the number of uninsured patients rises. However, because the government incentives for providers to take on Medicare and Medicaid patients remains constant (or even increase), the 60 patients that Hospital X used to see are now replaced with 60 new patients: those that are just as sick and unable to pay as the 40 it was left with before.
Hospital X is now treating the patients that no one else wants to touch. While this is admirable, it probably isn't intentional. Nor is it sustainable. Now that Hospital X is treating drug addicts, gangsters, and the like, its reputation begins to sink. Hospital X is not safe, Hospital X's staff is always overworked and won't give you the time of day, Hospital X's ED is overrun all the time, etc., etc. Those patients that can switch over to the private sector now do so avidly.
So what can Hospital X do?
I would argue that this is not the right question. In the midst of the economic and political forces that robbed it of a diverse (and paying) patient clientele to begin with, there is probably little that it can do on its own to resolve its financial burdens over the long term. A more appropriate question is, "How can the healthcare system be restructured to make public hospitals like Hospital X more viable?"
Clearly this is also a very complex question; if it weren't, we would have come up with an answer already. Knowing what little I do, I am of the opinion that bolstering the safety net is not the answer. Safety nets are not supposed to be stolid, massive, or otherwise "bolstered." They are there as a last resort. They should constitute a minor (albeit critical) part of a functioning healthcare system. It is primary or outpatient care that should be bolstered. We do not want to create even more public emergency rooms to meet an increase in demand for ER services. Erecting another hundred public hospitals to create the capacity to serve a hundred times as many poor or critically ill patients is not solving anything; it is just as reactive and short-sighted a solution as using expensive surgeries to curb the obesity epidemic. Why not figure out why so many safety nets are even needed in the first place? Surely, under a functioning healthcare system, there should not be so many patients that feel they can only count on the ED for care. Surely, there should not be so much uncompensated care that the institutions that take on underserved patients are in perpetually danger of insolvency. We should not be asking ourselves, "How do we save the public hospitals?" but "Why do they need to be saved?"
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