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Economics of Hospitals

August 24, 1986

It has been clearly demonstrated by controlled studies that treatment results (both surgical and non-surgical) are significantly affected by the numbers of cases in each specific hospital. It is also well known and established that currently, Orange County has an excessive number of hospital beds.

This translates into a relative potential inadequacy of medical care at certain institutions. It certainly suggests that additional hospital construction in Orange County is counterproductive from a standpoint of quality medical care. Eventually enlargement of existing facilities will be necessary, not new ones.

Medical economics differ from commercial in volume versus cost. The greater the number of physicians, the greater the number of hospital beds and the greater number of patients being treated and the more diagnostic activities and money spent. All this does not reduce the individual medical bill. It increases it.

In spite of all these accepted facts, a new hospital will be built in Irvine. Currently, Irvine is served by four hospitals, all within a 30-minute automobile ride and an approximately 15-minute ambulance ride. Indeed, one of the hospitals is visible from a significantly large portion of Irvine.

The new hospital will be relatively small, having fewer than 200 beds. It will cost well over $30 million and consist basically of a duplication of services already available to the community of Irvine. Its usefulness will be primarily as a profit venture for the private medical firm that is building the institution.

It clearly is a counterproductive measure for both the quality and cost of medical care in Orange County. There is not one good reason to build a hospital in Irvine, and just as certainly none for any private individual to financially support.


Santa Ana

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