Illinois Hospitals Hit Hard By Recession

Main Category: Medical Practice Management
Also Included In: Medicare / Medicaid / SCHIP
Article Date: 10 Apr 2009 - 3:00 PDT

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Illinois hospitals are being dramatically affected by the state and national economic crisis, according to a survey conducted by the Illinois Hospital Association (IHA). The survey found that hospitals, many of which were already struggling before the onset of the recession, are now facing new and significant financial challenges, with patients being affected as well.

"Our hospitals are not only essential to the health and well-being of the state's citizens, but as major employers they play a crucial role as anchors of social and economic stability," said IHA President Ken Robbins. "Illinois hospitals are not recession-proof. The current economic crisis threatens their continued financial stability and the well-being of patients who depend on them." The survey of IHA's 200 member hospitals and health systems found that the economic crisis is affecting hospitals in several ways:

The economic crisis is affecting their ability to meet day-to-day operations:

-- 32% of Illinois hospitals and health systems reported a moderate effect on day-to-day operations; -- 17% reported a significant effect.

Illinois hospitals and health systems are having problems gaining access to capital:

-- 26% report significant problems;

-- 24% report moderate problems;

-- 64% report increased costs for credit and bonds.

Illinois hospitals and health systems are postponing or deferring capital spending for general maintenance, renovations and upgrades of facilities and technology:

-- 73% are deferring current plans for capital investments;

-- 79% are deferring plans for new capital investments.

Patients in Illinois are being affected by the economic crisis:

-- 75% of hospitals and health systems report an increase in the number of uninsured patients;

-- 47% report increases in emergency department visits;

-- 55% report decreases in admissions, particularly elective procedures.

Illinois hospitals are waiting longer to receive reimbursement from all payers:

-- 78% report longer delays in Medicaid payments; the average Medicaid accounts receivable is 160 days, with some hospitals as high as 350 days;

-- 20% report longer delays in Medicare payments;

-- 30% report longer delays in commercial insurance payments.

Illinois hospitals have been taking steps to mitigate the impact of the economic crisis. In addition to postponing capital investments, 14% have made moderate staff reductions in the past year and 2% have made significant reductions. In the coming year, 29% of hospitals said they plan to make moderate staff reductions and 1% said they will make significant staff reductions.

"In these extremely difficult economic times, it is imperative that Medicaid and Medicare funding not be reduced so that health care remains available to all Illinoisans, especially to our most vulnerable populations, including the young, the elderly, the disabled and the newly unemployed, who have lost their employer-based coverage," said Robbins. "We ask that state and federal lawmakers protect our health care delivery system and take steps to preserve health care funding."

IHA is urging the Illinois General Assembly to take advantage of nearly $3 billion in additional federal Medicaid matching funds by reducing the Medicaid payment backlog -- which now stands at more than $2 billion in unpaid bills -- in order to meet a prompt pay requirement of the federal economic stimulus law. IHA and hospitals previously partnered with the State to establish a new five-year Hospital Assessment Program that is bringing the State nearly $4.5 billion in new federal Medicaid funds.

Prior to the current recession, more than half of Illinois hospitals (54.7%) were losing money on patient care. Hospitals have also been receiving substantially less than the cost of providing health care services for Medicaid and Medicare patients (75% and 89% of cost, respectively).

The IHA economic impact survey was conducted in February and March of 2009, with 138 (69%) of the Association's 200 members responding.

The Illinois Hospital Association, with offices in Naperville and Springfield, is an advocate for 200 hospitals and health systems and the patients and communities they serve.

Source: Illinois Hospital Association

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