HealthLeaders Media Finance - March 23, 2009 | Worse Before It Gets Better View as a Webpage | Subscribe for Free
Worse Before It Gets Better
Philip Betbeze, Senior Editor-Finance

The steady drumbeat of layoffs, construction cancellations, and investment account impairments for hospitals may only be the beginning, according to a recent survey that shows about half of hospitals are operating in the red. Trouble is, in many ways healthcare is a lagging indicator of the health of the economy. [Read More]

  March 23, 2009

 
Editor's Picks
Medicare rules on equipment worry patients
This is a case study of how common sense ideas about saving money in a government program get derailed. At issue is a Medicare plan to overhaul how it pays for home medical equipment, which in many cases can be had on the open market for half the cost Medicare pays. Last year, Medicare tried to implement the changes in a competitive bidding program tested in 10 major metro markets. Congress, which passed a law in 2003 mandating competitive bidding, then promptly voted to suspend the rollout, no doubt fearing the changes would hurt their chances of getting reelected. One of the quotes that made me roll my eyes is from a patient who opposes the changes, saying, "You get what you pay for." Of course, patients pay only 20% of the costs of such items. Guess what folks? Medicare's close to being insolvent. If common sense changes like this can't be made, there's no hope for more controversial types of healthcare payment reform. [Read More]
Chicago-area hospital CEO promises no layoffs this year
Going against the tide of mass layoffs in healthcare that we've seen in recent weeks, the CEO of Joilet, IL-based Silver Cross Hospital has promised that his 1,500 employees won't have to worry about losing their jobs in 2009. The hospital is doing well financially and even plans to build an $83 million replacement hospital. [Read More]
Sparing 450 jobs at Boston's Beth Israel
Like many employers in the economic crisis, Beth Israel will cut employees. But it's been able to hold those cuts to 150 people instead of 600 using a combination of wage freezes, salary cuts in high administrative jobs, and benefit reductions. The article is interesting, but more interesting are the comments in the section below the article—especially considering that CEO Paul Levy is so connected through his Internet blog. [Read More]
Two unions, once bitter rivals, working together to organize healthcare
The Service Employees International Union and the California Nurses Association have "buried the hatchet" to work together to unionize hospitals and push for universal healthcare coverage. The two unions have bitterly opposed each other in efforts to unionize registered nurses, but see an opportunity to divide up a bigger pie under an administration and Congress that are more friendly toward them. They will work together to push so-called "card check" legislation that will make it easier for hospitals to unionize, something I wrote about last week in my column. [Read More]
Finance Forum
The Great Deleveraging or Back to Basics?
The cause of recent problems in healthcare finance can't be explained simply by arguing that hospitals took on too much debt when debt was cheap. The real culprit, says HealthLeaders Media guest columnist Arlan Dohrmann, is too much financial complexity. Too many healthcare executives took on very complex financial instruments and misunderstood all types of risk inherent in these complex financial products. [Read More]
Finance Headlines
New Texas hospital in financial trouble
Fort Worth Star-Telegram - March 18, 2009
Two Tenet hospitals merge
Dallas Business Journal - March 19, 2009
Healthcare overhaul may cost $1.5 trillion
AP/Yahoo! News - March 18, 2009
Kaiser cuts 860 IT jobs after deal with IBM
San Francisco Chronicle - March 17, 2009
240 laid off at Brooklyn hospital
New York Times - March 16, 2009
Governor rejects UConn, Hartford Hospital plan
Hartford Courant - March 17, 2009
St. Francis may put Indianapolis construction project on hold due to economy
Indianapolis Star - March 23, 2009
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From HealthLeaders Magazine
SOS: Public Hospitals
HealthLeaders August 2008 On the brink even during good economic times, many public hospitals are operating in technical insolvency amid a painful recession. But they can take heart from following the example of two that have managed well. [Read More]
Service Line Management
Beyond Obstetrics
A changing female demographic has created new opportunities for hospitals to grow the women's health service line into much more than just labor and delivery. [Read More]
Money Talk

Appalachian Regional Healthcare, Hazard, KY
Rating: BB-
Outlook: Stable
Affected Debt: $71.5 million
Agency: Standard & Poor's
Remarks: Outlook revised from negative due to improved operating results following negative impact of two employee strikes.
[Read More]
Audio Feature

Finance Leaders Survey: John Winfrey, CFO at DCH Health System in Tuscaloosa, AL, offers insights on the HealthLeaders Media Industry Survey 2009, discussing the top drivers of healthcare costs and the financial implications of possible healthcare reform plans. [Listen Now]

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