Slow Payments Push Public Hospitals Towards Bankruptcy

Health care restructuring experts predict that the economic downfall “will force more municipalities to make the tough political call of shedding financially draining public hospitals, possibly through a bankruptcy filing,” according to a Wall Street Journal article that was published last week.

A big part of the problem is state Medicaid programs. The majority of public hospitals’ patients are insured by Medicaid, which has a strong track record of paying slowly. Adding to the slow-paying problem, the current economic downturn has been making it even more difficult for payments to be delivered in a timely manner.

So municipalities are left with a difficult decision: Continue covering their hospitals’ losses in addition to dealing with their other debts, orĀ  shut down the hospital so that residents lose out on health care and the hospital employees lose their jobs.

Click here to read the entire article: Downturn May Send Public Hospitals into Bankruptcy.

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