Report: Economy Sickening US Hospitals

TRENTON, N.J. — The dismal economy has American hospitals ailing, with new data showing declines in overall admissions and elective procedures, plus a significant jump in patients who can't pay for care, the American Hospital Association said Wednesday.

Hospitals also have been hurt by losses on their investments due to the turmoil on Wall Street, and many are finding it more expensive to borrow money _ if they can at all, according to a report from the association, which represents about 5,000 U.S. hospitals.

"The worst part is the combination of all of the above," said Rich Umbdenstock, the association's president and chief executive.

Some of the hardest-hit hospitals began reducing staffing and services as early as last spring and more will follow, although hospitals are trying to limit the impact on patients, said Umbdenstock. He said hospitals are more likely to eliminate entire services _ money-losers or ones with high operating costs _ than to make across-the-board cuts that weaken all services.

"There have been hospital closures (this year), particularly in some of the more heavily impacted areas," such as New Jersey, where hospitals are providing more and more unreimbursed care, he said.

The downturn is hitting hospitals worse than other industries, he said, and many already were struggling due to pressures including government programs such as Medicare and Medicaid not paying the full cost of treatment. Hospitals are worried the Obama administration's health care reforms will affect reimbursement rates for those two huge programs, which cover 55 percent of all hospital patients.

A hospital association survey about conditions over the past three months drew responses from 736 hospitals, and the association report also uses figures from the July-September period collected from 557 hospitals that send quarterly reports to a central system run by the Colorado Hospital Association.

The Databank hospitals' investment results amounted to a combined loss of $832 million, compared with a $396 million gain a year earlier _ a big problem because normally investment gains help make up for some of the costs not covered by patients and insurers.

Story continues below

advertisement

Meanwhile, the interest those hospitals paid on borrowed funds jumped by 15 percent in the third quarter, compared to 2007's third quarter, another difficult squeeze because hospitals generally borrow money for expansions and upgrades, multimillion-dollar technology and even sometimes to cover payroll and pay regular vendors.

Other key findings:

_67 percent of hospitals saw some drop in elective procedures; 6 percent saw a significant drop.

_63 percent saw some decline in overall admissions; 9 percent saw a bigger drop.

_Inpatient and outpatient surgeries and emergency department visits were all down roughly 1 percent in the third quarter.

_Half of hospitals have seen a moderate or significant jump in uncompensated care, with a jump averaging 8 percent. The association cites unemployed people losing their health insurance.

_Total profit margin at the Database hospitals dropped from an average 6.1 percent in 2007's third quarter to an average loss of 1.6 percent in 2008's third quarter.

_56 percent of hospitals are reconsidering or postponing renovations or expansions, and about 40 percent are delaying improvements to information technology or other equipment.

Comments

[anonimost]

55% on medicare/medicaid? hmm, yeah, we don't have socialized medicine already... right. too bad Medicare is not paying bupkis. Working in the medical field now, I have no idea how to get money out of Medicare. what are they using it for?

I'm for a universal plan but its not going to be perfect and there will be users of the system. but hopefully when in dire need, it will be there for us. And as for doctors, you only bit ch about them when you don't need one. when you find yourself crying on a gurney in excruciating pain, that's when you won't care how much he/she makes. i know, i've been there myself.

just like when people can't stand lawyers - until you need one.

it's just the way things are until/if there is a better balance to health care. probably not in my lifetime.

[AngryOhioan]

"The downturn is hitting hospitals worse than other industries, he said, and many already were struggling due to pressures including government programs such as Medicare and Medicaid not paying the full cost of treatment."
Its good to know at least one other person has correctly identified the biggest problem with our health care system.

[yogajan]

Part of the problem with hospitals is too much middle management. At lot of those positions can be eliminated and efficiency increased. I have seen this done effectively at an ambulatory surgery center, where there is no middle management. Everyone does everything and at the end of the year, profits are shared with the employees.

Also, doctors have to get over their egos and their education.

If the public only knew...

[RobinSeattle]

My Mom, a former pediatric nurse of 30 years experience, would second that emotion yogajan.

[RobinSeattle]

"The dismal economy has American hospitals ailing...."

That and illegal immigration.

[vjthedj]

Your perception of physicians is wrong. I think partly which I think is to blame, is the number of hospital shows on t.v. about physicians. It is ludicrous. 12 years of school is like no other school. You can think of it like prison. What normal people take for granted during those 12 years, doctors could never enjoy. Residency work hours(which is after medical school), has only recently been regulated so that resident physicians do not work less than 80hours, with most residency centers utilizing all 80 hours. You can think of it as prison time, never enjoyed the holidays, summer vacations, kids growing up. All this is on hold until they finish their minimum 12 years. By the way good luck in getting government to bring the down the cost of schooling. The average number of hours they work is at least 50 hours for primary care. You would think that they are enjoying the good life after all those years is greatly mistaken. Recent surveys which you can google have shown the the majority of PCP are not happy with their current job. If they had to do medical school over again, they wouldn't . The only thing keeping people even pursuing that profession is salary, and their own desire which many of them enjoy in their breaks.

[LunaPark]

Doctors are way overpaid and part and parcel the reason why health care costs are so high, of marginal quality, and difficult to get. Unlike other professions, the number of doctors is a political decision, controlled by congress through federal funding of medical residencies. The Accreditation Council for Graduate Medical Education, an arm of the AMA, tells congress how many MDs are needed. It's Enron style economics. Squeeze supply and drive up the cost. It needs to stop. Let the market control the number of doctors. Allow more foreign doctors to come to the US. Give nurses the training and prescriptive authority to care for patients that the egotistical doctors fail to address.

[S1m0n]

"Report: Economy Sickening US Hospitals"

And vice versa.