Hospitals recover from recession, some financial issues remain

The recent economic recession affected hospitals across the nation, regardless of financial status, but following the rebound, financially weak and safety-net hospitals continue to struggle, according to health researchers.

"Poor financial outcomes [for hospitals] could lead to poor care," said Naleef Fareed, assistant professor of health policy and administration, Penn State. "This is an issue that needs attention as health care reform moves forward."

Fareed and colleagues used data from both the American Hospital Association Annual Survey and the Centers for Medicare and Medicaid Services to analyze how different groups of hospitals fared financially during the recession, and where these groups stand as continues in the United States.

"The effect of the recession wasn't permanent," said Fareed. "Hospitals recovered from the recession, but those that were initially financially weak before the recession remained in a precarious condition through 2011."

The researchers looked at nearly 3,000 privately owned hospitals from 2006 through 2011. Included in the study were both for-profit and nonprofit hospitals, as well as safety-net and non-safety-net hospitals.

"A safety-net provides an unusually high amount of care to the poor and vulnerable population," said Fareed. He pointed out that many factors could be linked with a hospital being a safety net.

At the beginning of the study period, more than half of the hospitals were considered financially strong while about a quarter were financially weak. The remaining hospitals fell in the "financially mixed" category. All three of these categories of hospitals experienced a financial dip in 2008, but by 2011 financial status was comparable to the 2006 baseline for all three.

About 28 percent of the safety-net hospitals were financially weak in 2006. While their financial performance dipped in 2008, these institutions rebounded by 2011. However, the financial gap between the safety-net hospitals and the non-safety-net hospitals continues to widen in terms of their total profit.

"In many ways, our findings could be interpreted as showing that hospitals' cup is half empty or that it is half full," the researchers wrote in the May issue of Health Affairs. "On the one hand, financially weak and safety-net hospitals continue to keep their doors open. On the other hand, these institutions remain in precarious financial positions that could compromise their ability to invest in innovations or quality improvement activities that may provide value for patients."

Looking toward the future, Fareed and colleagues note that it is critical to monitor the state of hospitals, especially financially weak and hospitals, to assess how the Affordable Care Act affects the care they deliver and the populations they serve.

add to favorites email to friend print save as pdf

Related Stories

Survival of safety-net hospitals at risk

Sep 20, 2012

Many public safety-net hospitals are likely to face increasing financial and competitive pressures stemming in part from the recent Supreme Court decision on the Affordable Care Act, according to researchers at Penn State ...

Recommended for you

Can YouTube save your life?

22 hours ago

Only a handful of CPR and basic life support (BLS) videos available on YouTube provide instructions which are consistent with recent health guidelines, according to a new study published in Emergency Medicine Australasia, the jo ...

Doctors frequently experience ethical dilemmas

23 hours ago

(HealthDay)—For physicians trying to balance various financial and time pressures, ethical dilemmas are common, according to an article published Aug. 7 in Medical Economics.

AMGA: Physician turnover still high in 2013

23 hours ago

(HealthDay)—For the second year running, physician turnover remains at the highest rate since 2005, according to a report published by the American Medical Group Association (AMGA).

Obese or overweight teens more likely to become smokers

Aug 29, 2014

A study examining whether overweight or obese teens are at higher risk for substance abuse finds both good and bad news: weight status has no correlation with alcohol or marijuana use but is linked to regular ...

User comments