Independent community hospitals struggle to survive

Independent community hospitals, like Quincy Medical Center in Massachusetts, are struggling to stay separate from corporate ownership despite financial hardships. Because they're not part of a larger hospital chain, many of these stand-alone hospitals can't get higher payments from insurers or better discounts from suppliers, Samuel Steinberg, a hospital consultant in Daytona Beach, Fla., tells Kaiser Health News.

What's more, the healthcare reform law's plan to further cut Medicare and Medicaid payments may worsen the financial struggles of such hospitals. For instance, Medicare, Medicaid and another state plan account for more than 80 percent of Quincy's inpatient revenue. The hospital expects a 2 percent reduction in payments in October--a potential drop in revenue of $500,000 per year--according to Chief Financial Officer Mark O'Neill.

Some independent hospitals have shut down altogether because of financial strain, while others can't seem to resist the temptation to join a larger hospital chain to stay afloat. Between 1999 and 2008, the number of independent hospitals dropped by 290, according to American Hospital Association data. For the first three quarters of 2010, 70 hospitals and long-term care centers were acquired by larger systems, reports Kaiser Health.

Still, Quincy insists on remaining independent. "When physicians have a local hospital that they have a long-term relationship with, and they have some control as to how their patients are treated, that goes a long away in creating confidence among patients that they'll get good care," said interim CEO John Kastanis.

For more:
- read the Kaiser Health News article