Survey: Hospital spending shows signs of stabilizing

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Hospital capital spending in 2009 may end up a bit higher than originally projected--and procedure decline expectations are moderating--based on the findings of October’s installment of MEDACorp’s quarterly hospital administrator survey, conducted by the Boston healthcare investment firm Leerink Swann.

The MEDACorp survey, for the first time since October 2008, noted a trend toward smaller projected capital budget declines at participating hospitals. The participants, on average, projected a 4 percent capital budget decline. This projection is an improvement from the 13 percent projected decline in July.

This finding, according to the survey, suggests that budget forecasts are stabilizing, indicating stable hospital operating conditions and somewhat improving expectations.

Out of the 38 percent that expect delays or cancellations on capital purchases through the end of 2009 as a result of current economic conditions, 65 percent did not plan on canceling or postponing any health IT projects.

Visibility into 2010 budget trends, the report noted, remained limited as many hospitals were not likely through with their planning processes. Currently, based on the most recent two MEDACorp’s surveys (July and April), the network survey concluded there was no evidence that 2010 budgets will be dramatically different from 2009.

The October hospital survey respondents continue to anticipate slowing elective procedure volumes, particularly in orthopedic and general surgery procedures. However, the percentage of respondents projecting a slowdown decreased markedly from prior surveys, suggesting that downside risk for procedure volumes could be moderating.

A greater percentage of survey respondents did not anticipate any slowdown as a result of economic conditions over the next year for surgical procedures in orthopedics (hip and knee, 62 percent), cardiology (85 percent), gynecology (79 percent), urology (75 percent) and general surgical procedures (67 percent). In prior surveys, orthopedic and general surgical procedures were viewed as most at risk for a slowdown due to economic factors.

For the October survey, 61 hospital administrators participated in answering questions concerning trends in hospital reimbursement, admission and capital spending. Ninety-five percent of respondents were from not-for-profit institutions; 48 percent described their location as a “small city,” followed by “urban” (44 percent) and “rural” (8 percent). Finally, 75 percent were from community hospital centers, and 20 percent were from academic centers.