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Around the country, while some hospitals still are doing well, closings and bankruptcies seem to be picking up.
In New Jersey, where 47 percent of hospitals posted losses in 2007, five of the 79 acute-care hospitals closed this year, and a sixth may close soon. In Hawaii, nearly every hospital is in trouble, with two filing for bankruptcy and one nearly closing recently.
All over, hospitals are cutting costs by outsourcing services like housekeeping and security and trimming staff through layoffs, hiring freezes and attrition. Most are trying not to touch patient care jobs -- nurses, pharmacists, therapists and X-ray technicians -- as those already have staff shortages.
"The last thing we can do is skinny down our staffing right where we need it the most," said Mike Killian, marketing vice president for the three Beaumont Hospitals in suburban Detroit.
There, auto industry job losses and other factors now equal fewer patients with commercial insurance. The system expects a $22 million loss, its first in at least 40 years, Killian said.
So Beaumont this fall announced a $60 million restructuring program that includes 4-10 percent pay cuts for doctors and managers, reducing overtime for some employees and eliminating 500 jobs, 200 already vacant, mostly outside of patient care. Rich Umbdenstock, chief executive of the American Hospital Association, said some of the hardest-hit hospitals began reducing staffing and services as early as last spring and more will follow. He expects some to eliminate services -- money-losers such as behavioral health treatment, or those with high operating costs such as burn units -- rather than weaken their entire operation.
An association survey of more than 700 hospitals found two-thirds have seen elective procedures and overall admissions fall since July, and half have seen moderate or significant jumps in nonpaying patients.
An industry database on more than 550 hospitals found their third-quarter investment results amounted to a combined loss of $832 million, down from a $396 million gain a year earlier. During the quarter, those hospitals paid 15 percent more in borrowing costs and swung to a 1.6 percent average loss, from an average 6.1 percent profit margin a year ago.
"They're having serious problems getting the capital they need for needed renovations and upgrading their facilities," said Mike Rock, a lobbyist at AHA, which is seeking increased federal reimbursements from Medicaid and Medicare.
At Exempla Healthcare, with three hospitals in Denver and its suburbs, Chief Executive Jeff Selberg said there's usually a 5-7 percent annual profit margin, but this year investment losses wiped that out. He's scaled back a $200 million plan to upgrade facilities, information technology and clinical equipment and may halt construction of a new maternity unit and operating rooms at one hospital.
Selberg has seen a slight increase in bad debt and expects more problems.
"We feel like the wave is coming, but it hasn't hit yet, and we don't know how big this wave is going to be," he said.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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