Hospitals Aren’t Recession-Proof, and the Numbers Show It

Many of us Baby Boomers remember being told by our moms to “clean your plate” at dinner. Why? Because our parents lived during the Great Depression, where money was not plentiful, nor were jobs. I recall my mom making a ketchup and butter sandwich for herself for lunch; she told me that she ate them often as a child during the Depression. Things aren’t quite that bad yet, but I know plenty of folks who have been laid off. Unemployment in New Jersey is up to 7.1 percent at last count, and it threatens to rise even further.

Healthcare is not immune from the impact of the recession. NJHA just did a survey of our member hospitals to see how the recession is impacting them. Some of the findings are instructive – and a bit alarming:

  • 80 percent of hospitals reported an increase in charity care patients. That’s a likely sign of folks losing their jobs and, along with them, their health insurance. While that’s bad news for hospitals, the good news for patients is that even though they lack insurance, they are getting quality healthcare in their home state. Caring for the uninsured is part of hospitals’ missions, and it’s also a requirement in state law.
  • 76 percent reported an increasing number of patients in the Emergency Room. Again, that’s a likely result of people losing health insurance, and it’s bad news for the healthcare system. The ER is the most expensive place to receive care, so increasing ER use fuels rising healthcare costs. Plus, it’s much better for patients to receive their care in a physician’s office or other setting, rather than waiting until a minor ailment becomes a full-blown emergency.
  • Six out of 10 hospitals reported a decline in elective procedures as patients delay certain healthcare services. Even patients with insurance are avoiding costs like co-pays at this time. That loss of patients and procedures hurts hospitals’ revenues.

Those financial losses have a major impact on hospital employees. More than half of the hospitals in our survey reported layoffs in 2008, with another 21 percent anticipating layoffs this year. Those are tremendously difficult decisions for hospitals, but when the revenue from paid patients goes away or diminishes, and the number of patients without insurance goes up, something has got to give….

For communities and consumers all across our state, hospitals are a vital source of healthcare services, 145,000 jobs and so many other benefits. But they are not recession-proof – as we all, unfortunately, are learning.

Written by Betsy Ryan at 19:18


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Paul Szklarski said...
With 11% of the NJ population receiving Medicaid, hospitals may be working on the wrong end of the problem. The population of insured families with the capability of paying their co-pays and deductibles is shrinking. Hospitals need to step up services to meet the needs of this population - be accountable - and measure the success of penetration into this market. Attracting the insured patient is a system of inclusion for the uninsured because the weight of funding is relieved and the quality of the service goes up.
March 2, 2009 01:08
Ginnie Costello said...
I am currently considering enrolling in the Respiratory Therapy program at my community college. I have shadowed an RT and really loved it. However, I am hearing rumors that the job outlook for RT's is bad in NJ, and some hospitals are actually phasing out this position. If anyone could shed some light I would greatly appreciate it. I am 48 years old and can not afford to spend the next two years training for a job that is going to be phased out. Thanks very much in advance.
March 13, 2009 08:59