Economy hitting Pennsylvania hospitals

Health care is generally considered a relatively bright spot in the economy. It suffers less and later than other sectors during a recession.

Lest we think hospitals have it too good, though, the Hospital and Healthsystem Association of Pennsylvania (HAP) yesterday released results of a December survey showing that tight credit, ailing stocks, and financially strapped patients are hurting the state's hospitals.

Forty-two percent reported a moderate to significant effect on their day-to-day financial operations, and three-quarters are forecasting a moderate to significant effect on their financial stability this year. The organization let the hospitals - 118 of the state's 160 hospitals answered the survey - define what "moderate" or "significant" meant.

The release came with a plea not to cut government funding for Medicaid and Medicare or special programs like burn and trauma centers and obstetrical care.

Julie Kissinger, HAP's senior director for communications and public affairs, said hospitals were important islands of stable employment in many communities. "They are going to be far more vulnerable and therefore not as strong an anchor for their communities as they have been in the past," she said.

In the survey, 83 percent of hospitals said their investment income had declined significantly. In recent years, investments have boosted total income at many hospitals from the red to the black.

The credit crunch has left many hospitals with higher expenses for borrowing. Fifteen percent said they had not been able to issue bonds.

About half or more of the hospitals said they were reconsidering or delaying renovation projects or IT upgrades. The organization said hospitals were considering administrative and staff cuts and reviewing services that could be cut.

Kissinger could not offer any specific examples of delayed building projects or services that had been cut.

As for patients, half the hospitals said that there had been a moderate to significant decrease in admissions compared with projections. Some reported increases in emergency visits and in patients with mental-health problems. About half also said the number of patients who could not pay all or some of their bill had increased.

The results are much like those of a similar survey conducted by the American Hospital Association last year.

Michael P. Halter, chief executive officer of Hahnemann University Hospital, said his hospital was already operating frugally and was not expecting any layoffs. It plans to finish the renovation of its intensive-care unit and complete the $8 million to $9 million worth of projects it had planned for this year. "We don't have any huge capital expenditures planned that we would have to put on hold," he said.

Admissions were down across the board 15 percent in November, he said, but December admissions were 1 percent higher than in December 2007. "November could have been a onetime deal," Halter said. "I've seen that before." He expects flat admissions this year. The hospital has not seen an increase in uninsured patients or insured patients who can no longer afford their co-payments, he said.

On the other hand, he said, Hahnemann's parent, for-profit Tenet Healthcare Corp., wants to be well-positioned. "We are sitting here looking at the economy seeing all these people being unemployed or laid off, and we believe that one of the things we need to do is start to make some changes now in anticipation of things getting worse." He said he could not divulge the company's cost-saving plans, but that they do not involve layoffs.