The recession is taking its toll on Pennsylvania's general acute care hospitals, as new data reveals that their total margins plummeted to -6.3 percent for the period of July 2008 through December 2008.
"Hospital total margins have fallen off a cliff," said Carolyn F. Scanlan, president and CEO of the Hospital and Healthsystem Association of Pennsylvania. "In just two years, we've seen an unprecedented 12-point drop in margins. These dramatic changes affect hospitals' ability to retain staff, invest in healthcare technology and make capital improvements. And cutbacks in any of these areas affects hospitals' core mission to provide care for patients 24 hours a day, seven days a week."
Scanlan said that unless Pennsylvania legislators restore more than $75 million in combined state and federal Medicaid hospital funds that were cut from Gov. Edward Rendell's proposed 2009-2010 state budget, more hospitals would be forced to lay off staff and reduce or close services.
She said the added burden of the recession puts hospitals into "uncharted economic territory" that will affect communities and could leave patients with fewer healthcare alternatives, particularly if the proposed Medicaid reductions in hospital payments are enacted.
"We are seeing dramatic differences in the way people are managing their healthcare needs right now," Scanlan said. "A March HAP survey of Pennsylvania hospitals showed decreases in elective surgeries, increases in behavioral health visits and use of emergency departments and increases in the number of Pennsylvanians who are underinsured or uninsured. These trends match those reported in a number of national surveys, including one released this week by the American Hospital Association."
HAP had previously called on Rendell and state legislators to honor President Barack Obama's stated intent to spend Medicaid stimulus funds in a way that "will ensure that (states) don't need to make cuts to essential services that Americans rely on now more than ever."
"Hospitals... are major economic contributors," Scanlan said. "In 55 of 67 Pennsylvania counties, hospitals are among the top employers, and they annually contribute $84 billion and 625,000 jobs to the state's economy. We need to assure that hospitals can keep their doors open, especially now when people are struggling even more, and local economies need the assurance of a stable economic anchor."