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Hospitals continue to struggle financially

The downward trend, often tied to inequities in reimbursement, is likely to affect doctors who rely on facility upgrades and improvements.

By Mike Norbut, amednews staff. Nov. 17, 2003.

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More hospitals are slipping from the ranks of the financially stable, further dividing the haves from the have-nots in health care, according to a new study by the Healthcare Financial Management Assn.

The report, the first of six to be released over the next year by the association, also reveals hospitals are finding it more difficult in general to get financing for capital projects and service expansion.

The declining health of some hospitals can have a profound affect on the physicians who admit patients to them, especially if there are no other facilities nearby, said Richard L. Clarke, president and CEO of HFMA, which is based in Westchester, Ill.

A healthy, thriving hospital not only helps patients and the community by providing local care and a job resource, but it also can help physicians by providing an attractive environment to practice, he said.

"It very much is a partnership, and it's in the physician's best interest that the hospital performs well," Clarke said. "It may be a very valuable organization to the community. It's an asset that will wither on the vine if, in fact, folks bail out."

But hospitals may need more than continued support from physicians to reverse the current trend. The portion of hospitals classified as having broad access to capital declined from 42% in 1997 to 36% in 2002, while those with limited capital access rose from 11% to 19%, according to the report. Operating margins have decreased across the board as well, though that decline has been greater among hospitals with limited financing options.