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Economic woes rise; hospital margins drop

Hospitalist Leadership Connection, April 7, 2009

“Hospitals are struggling to make ends meet, [and] more than half in the red,” according to a new survey, “The Impact of the Economic Crisis on Health Services for Patients and Communities,” by the DATABANK Colorado Hospital Association and the American Hospital Association.

The Web-based reporting system DATABANK pulled information from 658 hospitals during the fourth quarter of 2008, compared it to the fourth quarter of 2007, and found that Americans are putting health care on the backburner as they tighten their budgets.

“As the economy worsens, fewer patients are seeking inpatient, surgical, and emergency hospital care, and more patients are unable to pay for the care they do receive,” according to the survey. The survey included the following statistics:

• Inpatient surgeries dropped by 2.2% year-over-year
• Emergency visits dropped by 2.8% year-over-year
• Ambulatory surgeries dropped by 1% year-over-year
• Discharges fell slightly by 0.5% year-over-year

The study attributes the hospital margin changes to higher unemployment rates, which typically results in patients losing their health insurance. From the hospitals’ perspective, the sinking margins can also be attributed to the lost of income from stock investments.

“The effects of the economic downturn, the subsequent rise in unemployment, and the loss of job-based health insurance have impacted hospitals like never before,” stated the study.

Read more about the economic effects on hospitals in “The good, the bad, the ugly: Economic crisis presents a mixed bag for inpatient services,” in the May issue of Hospitalist Leadership Advisor, a supplement to Medical Staff Briefing.

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