The Health of the Hospital Industry:

The health care reform package currently working its way through Congress is likely to have a major impact on the hospital industry, especially if huge numbers of uninsured people gain access to affordable health insurance. More customers will be good news for many hospitals already dealing with cash-flow problems related to the recession and in particular to the lower volume of patents. For, apparently, even people who have insurance are putting off non-emergency visits to doctors in response to the widespread economic downturn. Contrarily, others are actively pursuing elective surgery in anticipation of losing insurance benefits due to impending job losses.

Many medical institutions are still reeling from stock portfolio losses. Adding insult to injury, charitable contributions have reached a low ebb as well. The recently required reduction in Medicaid reimbursements has affected nursing homes more than hospitals, but budget meetings throughout the industry are not happy affairs.

So, the situation is somewhat chaotic, but clarity and practical economic assessments should be forthcoming with a decision by the government on passage of a bill targeting the health care industry, a bill intended not only to benefit health-care consumers but also to regulate health-care providers, most being major recipients of tax dollars.

In addition to the cash flow problems mentioned earlier, hospitals also face increasing costs for supplies and services, for malpractice insurance, for transitioning to greater usage of information technology, and for extending community outreach to include, for example, contracts with local food providers and farmers markets. Most are also attempting to burnish their image by reducing their institutions' carbon footprints, including recycling on a greater scale and finding ways to trim energy consumption.

Compounding the effects of the recession for the hospital industry is the swine flu pandemic, which is sending more and more people, especially children and their worried parents, to emergency rooms in cities and towns all around the country. Emergency room services are expensive and often coupled with a relatively low reimbursement rate.

Expansion and renovation projects have also been curtailed, re-configured, postponed, or dropped altogether due to the recent economic troubles. Layoffs of professional staff, including doctors and nurses, have even occurred in recent months. Some hospital systems, especially prominent ones like Johns Hopkins and the Cleveland Clinic, are faring better than others, especially the many struggling rural facilities; but, overall, the situation for the industry pretty much mirrors other major U.S. industries in recession-era 2009.

Baltimore-based Johns Hopkins Hospital, consistently cited as one of the best in the country if not the world, is a leader in IT implementation, published research, and novel approaches to patient care. It recently orchestrated a multi-patient, multi-hospital kidney transplant scenario, which resulted in successful operations for eight recipients which were matched up with eight donors.

Ohio's Cleveland Clinic, also a top-rated hospital and medical training center, recently started construction of a new outpatient facility near fast-growing Twinsburg in Summit County. On the IT front, this hospital organization has joined with database management company Explorys to develop a search engine for quickly accessing patient records, thereby creating an electronic source intended to analyze treatment options and, generally, to improve quality of care.

One of the largest public hospitals in the country, the Los Angeles County-USC Medical Center, is struggling to reduce overcrowding and very long wait times for visitors to its emergency department. It's a sign of the times that so many of the newly unemployed have had to resort to ER doctoring instead of turning to primary-care practices or company-supported HMO's.

New Hampshire's Dartmouth-Hitchcock Medical Center stresses continuing education and continuous on-the-job-training for all personnel. It runs a specially built Patient Safety Training Center, complete with simulation technology which incorporates mannequins, various hospital environments, and video monitoring.

One much-watched development in the hospital industry is a phenomenon known as medical tourism. Patients go outside their home countries in search of cheaper elective surgeries or else in pursuit of specialized care unavailable or unreliable in their own cities. If the U.S. government's health care reform actually impacts the very high cost of non-emergency operations like hip and knee replacements, then some travel abroad, to India for example, for medical purposes may diminish. Other nations, like the Middle East's Gulf States, are working hard to improve quality and professionalism in their own medical facilities in order to encourage patients to seek help at home instead of traveling to Europe or the U.S. for treatment.

This brief overview of the hospital industry shows a sector in flux, grappling with complex financial problems, confronting contemporary issues like the high-tech frontier, and facing up to its commitments to caring for the public whether insured or not.

Andy Miller, "Survey: Recession hits hospitals hard", Atlanta Journal-Constitution
Sean Ryan, "Nursing home market in Wisconsin leaves little to build", The Daily Reporter
Scott Graham, "Big losses mount for Baltimore's hospitals", Baltimore Business Journal
Cheryl Powell, "Health boom speeds up", Akron Beacon Journal
Tom Breckenridge, "Cleveland company developing Google-like service", Cleveland Plain Dealer
Molly Hennessy-Fiske, "County-USC hospital ordered to reduce ER wait times", Los Angeles Times
"DHMC unveils cutting-edge training center", New Hampshire Business Review