AHA: U.S. hospitals feel economic pinch, cut capital IT spending

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The economy is taking its toll on the patients and communities that hospitals serve, resulting in nine in 10 hospitals having to make cutback to address these concerns, according to a survey from the American Hospital Association (AHA).

Nearly all hospitals reported that the capital situation has not improved or is still deteriorating since December 2008. Since the beginning of 2008, eight of 10 hospitals have cut capital spending for facility upgrades, clinical technology and/or IT. Also, eight in 10 hospitals report an increase in the degree to which physicians are seeking the financial support of hospitals including on-call pay and/or employment.

For the majority of hospitals, these are some of the aspects cutting into their bottom lines: the proportion of emergency department patients without insurance is increasing; a higher proportion of patients are unable to pay for care and many hospitals are seeing more patients covered by Medicaid and other public programs for low income populations; fewer patients are seeking inpatient and elective services; and community need for subsidized services such as clinics, screenings and outreach is increasing even as charitable contributions are down for many hospitals, according to the report.

Of those hospitals which have made cutbacks, nearly half have reduced staff; eight in 10 have cut administrative expenses and one in five have reduced services communities depend on including behavioral health, post acute care, clinic, patient education and other services that require subsidies.

The report also said that despite these cutbacks, seven of 10 hospitals report a decline in overall financial health which will impact their ability to care for their communities.

Forty-three percent of hospitals expect losses in the first quarter, which is up from 26 percent for the same period last year, and indicators of the hospitals' ability "to meet their financial obligations are slipping."

The "AHA Survey, The Economic Crisis: Ongoing Monitoring of Impact on Hospitals" was sent to all community hospital CEOs on March 5, resulting in 1,078 responses.