KHN Morning Briefing

Summaries of health policy coverage from major news organizations

U.S. Hospitals Feeling The Squeeze During Economic Recession

The recession is taking a toll on the hospital industry as "cash-strapped patients are skipping visits and under-compensated cases are increasing," Forbes reports. "As a result, a pattern of cost-cutting has emerged as hospitals have tried not to sacrifice quality, access and safety." In addition, "There has also been the elimination of entire departments as well as often subsidized services like mental health. Such cuts, which can translate into longer wait times, less up-to-date technology and fewer services, are bound to affect patients."

"A survey of more than 1,000 community hospital CEOs conducted in March by the American Hospital Association found that nine in 10 hospitals had trimmed their budgets to weather the recession. Caroline Steinberg, vice president for trends analysis at the AHA, says revenue has dropped steeply as many Americans have delayed elective procedures. These are necessary but not emergency procedures such as a knee operation or a surgery to remove a blockage in the heart." Investment losses and state Medicaid cuts also have "fundamentally changed their balance sheets." For consumers, this can mean longer wait times and perhaps a greater risk of hospital acquired infection because of cuts to infection prevention budgets (Ruiz, 6/24).

The Washington Post reports that "Washington-area hospitals, already battered by the recession, are bracing for what could be a budget crisis in coming months resulting from funding cutbacks by Virginia and Maryland. Hospitals throughout the region are experiencing soaring demand from uninsured patients who cannot pay for their care and plummeting revenue from reductions in investment income, charitable giving and elective surgery." Hospitals "have coped by freezing salaries and putting off construction projects and equipment purchases. But some experts predict that it could get much worse in the next fiscal year." Chris Bailey, senior vice president of the Virginia Hospital and Healthcare Association, says "There will be a lot of hospitals that won't survive" (Haynes, 6/25). 

The Miami Herald adds that "The past year has been brutal for South Florida hospitals -- and this year is likely to be worse." Hospitals "suffered serious losses in their investment portfolios," and many "are beginning to feel the effects of the recession as their number of uninsured patients grows" (Dorschner, 6/25).

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