Patients Delay Treatments, Hospitals Experience Admission Decline

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Some hospitals have said they are experiencing a decline in patient admissions as the recent economic downturn might have led some patients to defer major procedures and elective treatments that are among the most lucrative for hospitals and "tend to subsidize the charity care and unpaid medical bills that are increasing as a result of the slow economy," the New York Times reports.

Overall inpatient hospital admissions were down by 2% to 3% in September compared with a year earlier, according to a survey by Citi Investment Research analyst Gary Taylor of 112 not-for-profit hospitals. Taylor said that during the economic downturn, the "only way [patients] are going to tap the health care system is through the emergency room," when they no can longer delay treatment. Some hospital industry experts say that patient admissions seem to have declined "more sharply" as "the economy has slid more steeply toward recession in recent weeks," the Times reports.

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According to the Times, admission declines "may still seem relatively slight," but "hospital executives and consultants say it is already having a profound impact on many hospitals' profitability," because as "fewer paying customers show up, there has been a steady increase in the demand for services by patients without insurance or other financial wherewithal, many of whom show up at hospital emergency rooms." The Times reports, "The situation is exposing a main vulnerability" of U.S. hospitals: "When there is a decline in profitable procedures paid for by private insurance, hospitals have less money to offset the relatively lower fees they receive from government insurance programs like Medicare and Medicaid." Richard Gundling, an executive at the Healthcare Financial Management Association, said, "Hospitals have to balance the mix of patients in order to survive."

Hospitals are trying to reduce costs by laying off workers, consolidating or closing facilities and halting new construction and development projects -- "an abrupt change for an industry traditionally seen as insulated from economic woes," the Times reports. In addition to declining admission rates, credit market problems are affecting not-for-profit hospitals that rely on raising capital for new developments through the municipal bond market. "Making matters worse for some hospitals has been a slowdown in bill payments, particularly by state Medicaid programs," the Times reports.

David Rock, a health care consultant at Carl Marks, predicts that hospitals soon will begin to re-evaluate and scale back on services they provide, paying particular attention to costly elective procedures, such as bariatric surgery. He said "It's safe to say hospitals are no longer recession-proof" (Abelson, New York Times, 11/7).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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