PA hospitals say recession has hit them hard

A new survey of Pennsylvania hospitals has found that, not surprisingly, the ongoing U.S. recession has had a significant impact on their business. The survey, by the state's hospital association, found that its members are struggling with contracting budgets, falling cash reserves and varied credit problems that have made it an expensive hassle to borrow. This, of course, has forced the hospitals to consider delaying spending on technology or clinical equipment, as well as on new construction.

One particularly vexing problem for the hospitals has been the decline in investment income, with 80 percent reporting a drop. (This certainly echoes results experienced by hospitals around the country, some of which have shown losses for the first time in years due to poor investment returns.)

But the hospitals' problems with borrowing are even worse. Forty-five percent of responding hospitals said that the cost of debt had increased, while 15 percent of respondents said they'd been unable to issue bonds and 12 percent have been forced to pay back their debts on a more rapid schedule than expected. Meanwhile, 9 percent of borrowers haven't been able to renew bank guarantees or lines of credit for outstanding bonds.

To learn more about the study:
- read this Modern Healthcare piece (reg. req.)

Related Articles:
Case study: Credit crunch forces MI hospital to close
For hospitals, something's gotta give
Trend: Hospital investment returns still looking shaky
Painful cash crunch leaves few good options

Suggested Articles

John Muir Health is joining forces with Optum as part of an effort to maintain its independence, the two companies announced. 

Clinical Pathology Laboratories, based in Austin, Texas, says 2.2 million patients may have had their personal information compromised.

A global budget model launched by Blue Cross Blue Shield of Massachusetts slowed healthcare spending growth by 12% over eight years.