Although the U.S. economy is beginning to show signs of recovery, hospitals are still impacted by the lingering effects of the economic recession, according to the American Hospital Association.
A recent AHA study found that nearly three-quarters of hospitals reported reduced operating margins, and 44 percent reported a reduced access to capital. Nearly a quarter of hospitals reported that their ability to access capital is worsening, and 67 percent of hospitals have not started or continued capital projects that were put on hold due to the recession, according to the study.
The AHA survey also found that patients continue to delay or forego care as family budgets remain tight, with 70 percent of hospitals reporting fewer patient visits and elective procedures.
According to the AHA, enrollment has increased in both Medicaid and the Children's Health Insurance Program. These programs traditionally don't cover the cost of hospital care, placing increasing financial strain on hospitals. The study found nine in 10 hospitals reported an increase in uncompensated care.
"Today's data demonstrates why it is essential Congress act now to extend Federal Medical Assistance Percentage (FMAP)," said Rick Pollack, executive vice president of the AHA. "Without an immediate extension of FMAP, states may cut Medicaid funding that millions of our most vulnerable patients – children, the disabled and the poor elderly – depend upon."
Hospitals are making significant changes in an effort to weather the economic storm, AHA researchers said. Common options have included cutting administrative costs, reducing staff and curtailing services, they said. Eighty-nine percent of hospitals surveyed said they have not added back staff or increased staff hours and 98 percent have not restored services or programs previously cut due to the downturn in the economy.
The report is based on data from 572 non-federal, short-term, acute care hospitals collected in March and April 2010.