Medical Facilities Blaming Everyone Else For Their Woes

July 1st, 2009 by admin

Medical facilities are having layoffs and scrapping or delaying building projects and more closings and mergers are on the way, industry consultants predict.

They’ll get taken over by somebody else, if they need to exist, and if they don’t, they’ll just be shut down. Most endangered are rural hospitals and urban ones in areas with excess hospital beds and a lot of poor, uninsured patients.

Hospitals are reporting that their donations are down, patient visits are down and their profitable diagnostic procedures and elective surgeries have decreased 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.

The Oh Woe Is Me Problems– stingy reimbursements from commercial insurers (whom are trying to make a profit themselves), even-lower payments that generally don’t cover costs for Medicare and Medicaid patients, and high labor and technology costs. Medicare and Medicaid is set to pay close to the actual cost, not much if any profit for the procedure itself, nor the salary of upper management.

In the past few months, patients and insurers have been paying hospital bills more slowly. As a result, some think hospitals will start demanding up-front payments for elective procedures, which will lose patients.

When I worked on a lawsuit for the state of Indiana I had to prove that Medicaid was paying the appropriate dollar amount to providers. I took into account the salary of the work employees, automobiles, insurance or supplies used. Amazingly, when the salary of the owners, administrators, top management was not included the amount paid did make a profit for the service rendered.

As insurance changes the salaries of the top management for medical facilities will have to drastically change and also for insurance companies top management.

Few hospital are willing to have a true cost consultant come into their facility, because they know they will find a huge waste of money in many areas. Hospitals and other medical facilities are using the General Motors Model and not the Toyota model.

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Hospitals suffering from fewer paying patients that take longer to pay, stock market investment losses, and tighter credit from banks

March 25th, 2009 by admin

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Now, because of the recession, many U.S. hospitals are being squeezed by tighter credit from banks, stock market investment losses and many patients have become recently unemployed or otherwise lost their insurance or are now underinsured.  Many are not paying their bills.

All of these conditions have begun to trigger more hospital closings as well as layoffs, cost-cutting in the delay of purchasing new technology and stopping or delaying building projects.

The most susceptible are rural hospitals and big urban hospital in areas with excess empty hospital beds and a lot of poor patients, or the underinsured/uninsured patients.

Hospitals in the United States, employ approximately 5 million people, are reporting that investment returns are down due to the stock market, patient visits have lessened and profitable diagnostic procedures (as in MRI’s) and elective surgeries (as in joint replacements) are declining as people with inadequate insurance or high deductibles delay care. But many of those patients are turning up later at the Emergency Room, seriously ill. This makes it tough for hospitals to lay off nurses and doctors.

All those problems are aggravating their financial status: low reimbursements from commercial insurers and high labor and technology costs. The rising number of people with high-deductible health plans is increasing unpaid patient bills.

In the past year, patients and insurers have been paying hospital bills more slowly due to the economy. As a result, some hospitals want start demanding up-front payments for elective procedures. The problem with this is Medicare, Medicaid, and most commercial insurance contracts do not allow this type of practice to occur.

The cost of borrowing will likely be higher for everyone.  Hospitals borrow for everything from expansions and equipment to payroll and supplies. Hospitals will have to look to other options for huge expenses.

Some hospitals are deferring millions in equipment purchases, shifted management meetings to free facilities and adopted employee suggestions to save millions more.

Some hospitals are doing well financially if they are in control of their expenses. Many closings and bankruptcies are increasing.

Hospitals have to cut costs by outsourcing services like housekeeping, security, coding staff, transcription, and trimming staff through layoffs, and hiring freezes. Since there are many staff shortages many hospitals are trying not to touch patient care jobs — nurses, pharmacists, physical and occupational therapists and X-ray technicians.

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