Changes in Service Availability in California Hospitals, 1995 to 2002 (Financial Challenges of Hospitals‪)‬

EXECUTIVE SUMMARY Hospitals face serious financial challenges in the current healthcare marketplace. In response to these challenges, they may alter their service offerings, eliminating services that are perceived as money-losing or adding new services in areas where profitability is expected to be greater. Although research has examined hospital closures, the more subtle phenomenon of hospital service changes has not been systematically studied. This issue is important because different types of hospital service changes could have different effects on hospital financial viability: extensive service closures could contribute to a downward spiral leading to hospital closure, whereas adding new services might help improve a hospital's finances.