A newly reopened hospital in Brownsville is unable to make its payroll because of cash flow problems that have plagued it for a decade. - No Paychecks for Hospital Workers
This is but one of 550 hospitals in the US that found their third-quarter investment results amounted to a combined loss
of $832 million, down from a $396 million gain a year earlier. MSNBC
Do the math. That's a combined negative performance...of $1 billion in 12 months. Profits of $396 million for Q3, 2007 turned into losses of $832 million in Q3, 2008.
How's that possible? Healthcare is one of the few growing sectors in our economy now. And it is projected to remain one of the few growing sectors during this recession.
What's changed so much, then, for hospitals in the past 12 months? Declining medicare reimbursements, some impact. Rising capital costs, some impacts. (But hospitals aren't the only ones facing that.)
The big change is this:
Tim Goldfarb, CEO of Gainesville-based Shands Healthcare, said his system, Florida's second-largest provider of charity care, this year has seen bad debt jump 20 percent from patients with no insurance.
The hospitals are forced to write this debt off. It's uncollectible. This debt doesn't arise from elective surgeries like face-lifts and tummy-tucks, liposuction and botox treatments.
The bad debt that's being written-off are the catastrophic healthcare costs from life-threatening healthcare needs which the uninsured or underinsured can no longer ignore. These are the healthcare costs that generate 49% of personal bankruptcies. These are the unpaid healthcare costs that are trickling down (up) to hospitals in an increasing number.
As unemployment figures rise, more people will forgo health insurance or preventive healthcare. This will translate into increasing numbers for catastrophic healthcare costs that legally must be borne by hospitals. They'll raise their prices. Insurance companies will raise our premiums. More uninsured will file bankruptcies forcing their creditors to pass on those higher costs to all consumers.
Hospitals are the latest casualty, maybe. But the costs are passed onto us in the form of these hidden taxes of higher healthcare costs to compensate for the unpaid bills of the un/under-insured, the higher prices in consumer goods that results from the growing numbers of personal bankruptcies that arise from catastrophic healthcare costs, higher premiums. It's a little late for political leaders to talk about whether to raise or not raise taxes to pay for healthcare. Those taxes are already present. The only question left to answer is if we'll admit their presence.
Brownsville link from Gregg Masters
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