Survey says poor economy has left hospitals ailing, too

November 20, 2008|Associated Press

TRENTON, N.J. - The dismal economy has US hospitals ailing. New data show declines in admissions and elective procedures, plus a significant jump in the number of patients who can't pay, the American Hospital Association said yesterday.

Hospitals also have been hurt by investment losses, and many are finding it more expensive to borrow money - if they can at all, according to the association, which represents about 5,000 hospitals.

"The worst part is the combination of all of the above," said Rich Umbdenstock, the group's 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, Umbdenstock said. 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.

Meanwhile, the interest hospitals paid on borrowed funds jumped by 15 percent in the third quarter, compared with 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 down roughly 1 percent in the third quarter.

56 percent of hospitals are reconsidering or postponing renovations or expansions, and about 40 percent are delaying improvements.