Impact of the Recession

Non-profit hospital chiefs who think they've been dragged through the wringer with the credit crunch and the recession should not think the worst is over, according to a new Moody's Investor Service report, which could be summed up in short: Brace yourselves for more bad news and changes for many years ahead.

Although the U.S. economy is beginning to show signs of recovery, hospitals continue to be adversely impacted by the lingering effects of the economic recession, according to new data from the American Hospital Association (AHA).

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“Particularly during this recession, the health care industry has been one of the few industries adding jobs,” said Rick Black, spokesman for Dallas-based Tenet Healthcare Corp.

A new report by credit reporting giant TransUnion concluded that hospitals around the country are not only being hit hard by the recession, but California’s facilities may be faring worse than others.

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The median profit margin of U.S. hospitals has fallen to zero percent, according to a Thomson Reuters analysis of hospital finances.

According to an August 2009 policy brief published by the Kaiser Commission (hotlink to the report), hospital emergency rooms in California and elsewhere are "operating at or over capacity" with an increasing number of patients seeking care. According to the report, several emergency rooms studied were described as "overwhelmed" or "close to the breaking point."

Hospitals nationwide and in San Diego County are feeling aches and pains from the deepening recession, and some predict a worse prognosis in the coming months. More patients aren't paying their hospital bills, and more are putting off elective procedures to save cash. Construction projects at some medical centers have been put on hold, and administrative jobs are being consolidated or left open when they become vacant.

Hospitals in California and elsewhere are hurting from financial, economic and government crises hitting all at once.