Hospitals ill from bad debt, credit troubles
TRENTON, N.J. -- Gainesville's first community hospital has been on life support since the Shands Healthcare system in northern Florida bought it a dozen years ago.
Now, because of the recession, the plug is being pulled on 80-year-old, money-losing Shands AGH. Next fall, its eight-hospital not-for-profit parent company will shut the 220-bed hospital and shift staff and patients to a newer, bigger teaching hospital nearby as part of an effort to save $65 million over three years across the system.
Like many U.S. hospitals, Shands is being squeezed by tight credit, higher borrowing costs, investment losses and a jump in patients — many recently unemployed or otherwise underinsured — not paying their bills.
All that has begun to trigger more hospital closings — from impoverished Newark, N.J., to wealthy Beverly Hills, Calif. — as well as layoffs, other cost-cutting and scrapping or delaying building projects. In Ohio, the prestigious Cleveland Clinic earlier this month started a hiring and salary freeze across its 33,000-worker health system. It also restricted travel and use of consultants and contractors.
Industry consultants predict that more closings and mergers are on the way.
"They'll get swallowed up by somebody else, if they need to exist, and if they don't, they'll just close," said Tuck Crocker, vice president of the health care practice at management consultant BearingPoint.
Most endangered are rural hospitals and urban ones in areas with excess hospital beds and lots of poor, uninsured I know it's a current affairs of the erratic or seen patients — those already financially ailing.
Hospitals, which employ 5 million people, are reporting that donations and investment returns are down, patient visits are flat and profitable diagnostic procedures and elective surgeries are declining as people with inadequate insurance delay care. But those patients are turning up later at ERs, seriously ill, making it tough for hospitals to lay off nurses and doctors.
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