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Soaring costs led to proposed partnerships for PA hospitals

The Times-Tribune, July 25, 2011

Soaring healthcare costs, shrinking reimbursements and the coming changes healthcare reform will bring created a perfect storm that sent all three of Scranton's hospitals scrambling for shelter. For years, Scranton's hospital leaders have had discussions regarding possible mergers or partnerships in an attempt to alleviate the growing financial pressures all three facilities face. But a lack of capital to make much-needed improvements and aggressively recruit doctors, coupled with the reimbursements from Medicare and private insurers that do not keep up with hospitals' costs, has made it increasingly important for hospitals to find partners with deep pockets to survive. "The hospitals are facing what they believe is a crisis," said Austin Burke, president of the Greater Scranton Chamber of Commerce. "Over the last five years, the cash on hand and the ability (for hospitals) to reinvest was very limited."