Hospitals Face Financial Squeeze

We found an interesting article in The Wall Street Journal on May 1 detailing a study conducted by the restructuring firm, Alvarez & Marsal.

According to the study, 2,000 of the nearly 3,900 acute-care hospitals are not able to make a profit from treating patients. Furthermore, nearly 750 of the hospitals who do turn a profit stil do not have enough to reinvest in improvements and other essential expenditures.

Industry experts say competition from same-day surgery cents and outpatient clinics drive occupancy levels down. In addition Medicaid and Medicare reimbursements are decreasing couples with a high number of uninsured patients are part of the problem.

Click here to read the entire story: Hospital Face Financial Squeeze. (Note: Subscription required).

Nonprofit Hospitals, Once for the Poor, Strike it Rich

Did anyone read the article Nonprofit Hospitals, Once for the Poor, Strike it Rich on the front page of The Wall Street Journal’s April 4 edition? 

The article details how nonprofit hospitals are outperforming their for-profit rivals by utilizing tax breaks and being frugal with their required community care, also known as the “free treatment for poor patients that nonprofit hospitals are expected to provide in return for the deferal and state tax breaks they receive.”

Of the 3,400 hospitals in the United States, 2,033 are nonprofit hospitals.  77 percent of those nonprofit hospitals are operating in the black, while only 61 percent of for profit hospitals are profitable, according to data from the American Hospital Directory (AHD).

As to be expected, nonprofit hospitals are facing some scrutiny, and new IRS standards are set for 2009 which will require nonprofit hospitals to break out specifics of their community-benefit contributions.

Nonprofit hospitals are claiming a number of reasons why they are flourishing where their for-profit counterparts are not, namely:

Gradual increases in Medicare reimbursements since the 1990s
Demanding upfront payments from patients
Hiking list prices for procedures and services
Selling patients’ debts to collection companies
Focusing on expensive procedures
Issuing tax-exempt bonds and investing the proceeds in higher-yielding securities


Read the entire article by clicking here: Nonprofit Hospitals, Once for the Poor, Strike it Rich

 

Americans Travel to Bangkok to Receive Medical Care

Outsourcing medical transcription to the Philippines and India has been one a hot topic for medical transcription service owners for the past couple of years.  And allowing foreign-trained nurses come into American hospitals has been an area of debate for some time in the medical staffing world.  This trend might take even more precedence–the rising popularity of overseas hospitals catering to uninsured and underinsured Americans.One such growing example of this kind of foreign health care facility is Bumrungrad Hospital.  Located in Bangkok, Thailand, half of the 65,000 Americans who went to Bumrungrad Hospital for in-patient or out-patient treatment last year were uninsured U.S. residents who flew across the Pacific for medical care.

Click here to read the BusinessWeek article: Checking into Bumrungrad Hospital.

 

Cleveland Clinic Teams Up with Google for National Medical Records

On February 20, Google and The Cleveland Clinic announced that they were collaborating on an electronic personal health record (PHR).  There are plans to enroll 1500-10,000 of the Clinic’s patients to use the pilot version of Google’s password protected online medical record system.

A Cleveland Clinic press release explained the new project “will test secure exchange of patient medical record data such as prescriptions, conditions and allergies between their Cleveland Clinic PHR to a secure Google profile in a live clinical delivery setting.”

The Cleveland Clinic view this partnership as a strategic step to help create national access to electronic medical records for free, putting the power and the responsibility back in the patients hands.

Atlanta Hospital Falls into Financial Crisis

Another more pressing article appeared in The New York Times (1/8/08) concerning Grady Memorial Hospital’s declining financial status. A multimillion dollar shortfall of the 675-bed hospital is due to providing charity and emergency care that no entity (not the sourrounding counties, nor the state or federal government) has been willing to cover.

 

The lengthy article cites Medicaid and underinsured and uninsured patients as the culprit for Grady’s cash flow problem. To date, Grady Memorial estimates it would take a whopping $366 million to meet the long-ignored capital needs, which include outdated and broken equipment and nurse staffing shortages.

 

Although we mentioned before that Grady Memorial Hospital was paying it’s vendors in about 30 days, it’s currently taking PRN Funding’s clients at least 60 days to be paid by the facility.

 

Click here to read the entire article, A Safety-Net Hospital Falls Into Financial Crisis. Please note, that you might have to create an account to view the article.

 

Michigan State Cannot Pay Hospitals

Similiar to the situations in California and Illinois, Michigan’s state governement is also cash-strapped, delaying their payments to hospitals. Originally, hospitals such as Detroit Medical Center, were supposed to receive their share of $54 million in state and federal payments in April and July, but now September 26 is the day these medical facilities are told they will receive the funds. Until then, hospital finance officers say the hospitals have to do some rearranging of inhouse funds to combat the delayed payments.

Click here to read the entire article: State can’t pay hospitals: Fiscal problems force long delay of $54 million.

Illinois hospitals wait for government funding

There’s another state besides California whose needy hospitals are caught in conflict waiting on the government to release funds.  Mercy Hospital & Medical Center and Norwegian-American Hospital are just two of the hospitals awaiting their share of $1.2 billion in funding caught up on state government infighting.  The longer these facilities wait for government payouts, the further they will have to stretch their payables to their temp nurse staffing, medical transcription and medical supply vendors.

Click here to read the entire article in the Chicago Tribune: With late state, hospitals wait; Needy facilities caught in conflict.  (NOTE: There is a short registration process to access this article online.)

Number of Americans without health insurance in 2006

The breaking news on ModernHealthcare.com for August 28 reads:

The number of people in the U.S. without health insurance coverage rose to 47 million in 2006, or 15.8% of the population, up from 44.8 million, or 15.3%, in 2005, according to the U.S. Census Bureau.


To read the entire article, visit modernhealthcare.com.


This surge in the uninsured continues to affect the healthcare cash crunch, causing the underpaid and slow-paid healthcare institutions to struggle to pay their vendors.

Californias Late State Budget will cause some hospitals to struggle

After reading an article on SFGate.com on July 31 detailing how California’s late budget is affecting some of the state’s healthcare providers, we thought that it would be a good idea to share some excerpts with our readers written below.

Please click here to read the entire article: State budget struggle hobbles some hospitals. (NOTE: If you are not registered with SFGate.com, there’s a short form to complete before viewing the article.)

“Doctors Medial Center of San Pablo, already struggling with bankruptcy, got more bad news Monday when state officials announced that the hospital likely will not receive its Medi-Cal reimbursement payment this week because of the state’s late budget. The payment is part of an expected $227 million statewide reimbursement the state owes to hospitals, clinics, nursing homes and other institutions that provide care for an estimated 7 million elderly, disabled, low-income children enrolled in Medi-Cal..A total of $1.1 billion in payments, including Medi-Cal reimbursements, have not been made since July 1, according to the state controller’s office.”

In a nutshell, this article explains how even slower government payments will affect the cash flow of some California healthcare institutions. Certainly without a solid stream of cash coming into these facilities, they will be forced to start extending the terms with some of their vendors.

Grady on Verge of Collapse, report says

Grady Health System will shut its doors, flooding other Atlanta hospitals with a “patient tsunami” of the indigent unless it overhauls its governing system and lines up new funding sources, a Metro Atlanta Chamber of Commerce task force said in a report to be released today.

 

PRN Funding, LLC felt that this article might be of particular interest to those vendors who are selling within the Atlanta metropolitan area. To date, our current clients serving Grady Hospital are being paid within 30 days, but things might start to change now that this announcement has been made. Click here to read the entire article: Grady on verge of collapse, report says.

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