The region facing pushback over high bed capacity

Western Pennsylvania hospitals are facing pushback after a report found the region has high bed capacity and lower than average occupancy rates, the Pittsburgh Post-Gazette reported Jan. 9.

Hospitals have licensed 229 new beds between 2017 and 2021 — all but three of which came from hospitals opened in the Pittsburgh area by Allegheny Health Network, according to business consulting firm Compass Lexecon. The report said 29 counties "still remain an overbedded healthcare market for inpatient services since 2017."

There is no metric to determine the right number of hospital beds for a region, but critics pointed to the region's lower than average occupancy rate as a sign there are too many beds. In 2021, all but one hospital owned by Allegheny and UPMC had occupancy rates below 62.5%, the national average. Economists told the news outlet that unnecessary duplication of medical services and equipment cost the consumer in the form of higher health insurance premiums.

Hospital and Healthsystem Association of Pennsylvania spokesperson Chris Daley told the Post-Gazette that reducing the number of hospital beds, especially in rural areas, is not the answer. 

"Hospitals in rural areas often serve smaller populations, but remain vital local resources," he wrote in a prepared statement. "While their overall occupancy rates may be lower than in more populated areas, they are crucial to meeting local needs. Hospitals must remain flexible to accommodate unforeseen surges in demand and rising patient acuity. This flexibility ensures communities have access to critical care when they need it most."

Harold Miller, president and CEO of consulting firm Center for Healthcare Quality & Payment Reform,told the Post-Gazette that inpatient bed counts "tells you something about the physical plant capacity to be able to handle patients, but it's not all that relevant for anyone anymore."

The Compass Lexecon study, released in December, was commissioned by the state as part of ongoing monitoring of insurer Highmark's acquisition of Allegheny Health Network in 2013, according to the report. 

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