Business
One-third of hospitals in the red
NEWS IN BRIEF — Posted Dec. 6, 2004
Hospitals have lost financially as costs have risen while payments have dropped, says the latest survey by the American Hospital Assn.
In an overview of health care trends in 2003, the survey found that payments overall failed to keep pace with the costs of caring for patients, causing operating margins to decline. Accordingly, the financial health of hospitals was so fragile that many of them were operating in the red.
"We still are showing about a third of hospitals with negative total margin, which is steady from [the previous] year but significantly higher than in the 1990s," said Caroline Steinberg, vice president for trends analysis for the AHA.
Steinberg cited two primary reasons for the trend: "Payment rates have not kept pace with cost, and there is a growing burden of uninsured patients."
The latest AHA Hospital Statistics report was released on Oct. 25. It included data gathered from more than 5,000 hospitals and health systems nationwide. The survey found decreasing payments involving government programs, with Medicare reimbursing 95 cents for every dollar hospitals spent on Medicare patients in 2003, down from about 98 cents per dollar spent a year earlier.
At the same time, Steinberg said costs were climbing due to work-force shortages, advancements in technology and soaring medical liability premiums. She said the cost per patient for an adjusted admission was up 6% in 2003 to $7,796.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2004/12/06/bibf1206.htm.
