The Evolving Structure of Multi-Hospital Systems in the US: Focus on California

Abstract

Objectives: Hospital consolidation and the growth of multi-hospital systems are generating media headlines in the US. While there is a growing literature on the role of multi-hospital systems in the US health care system, it is still quite limited. This study helps fill the gap by documenting and describing the structure and evolution of multi-hospital systems in California over a recent 18-year period. Methods: Descriptive analysis of a hospital level longitudinal database covering the period 2002-2019 in California. Results: The total number of hospitals declined by 40 hospitals, from 445 to 405, over the study period and the total number of multi-hospital systems increased substantially from 14 systems in 2002 to 30 systems in 2019. As a result, the number and proportion of all California hospitals that were part of a multi-hospital system grew—from 177 in 2002 to 238 in 2019. By 2019, 59% of all hospitals were part of systems (compared to 40% in 2002). The size distribution of multi-hospital systems in California changed substantially over time. In the early period, larger systems dominated the system landscape. Now, half of all systems have 5 or fewer hospitals compared to 29% in 2002, while the percentage of systems with 25 or more members has declined from 25% to just 7%. Interestingly, the clinical service mix of hospital systems has changed substantially. In 2002, all 14 systems were largely acute care focused. By 2019, less than half of systems had acute care as their only and primary focus. Conclusions: Combined, these findings provide insight into the development, evolution and growing role of hospitals systems in our health care system and identify new areas for further research.