Hospitals cope with losing money

Kentucky's Jewish Hospital and St. Mary's HealthCare is eliminating 500 jobs this month. The layoffs represent the first large-scale cuts in a Louisville-area hospital system since the recession began. 

Louisville Courier-Journal: The cuts come because of "lower patient volume and a growing number of uninsured patients brought on by the lingering recession." They are only one part of a cost-cutting program the hospital enacted. "Jewish's long-range cost-savings plan also includes measures such as changes in vendor selection and supplier contracts, and [Transitional Chief Executive Officer Janice] James said the company is evaluating services that don't have enough customers to cover costs or that duplicate what's offered elsewhere in the community."

The financial problems being faced by Jewish Hospital are not specific to Louisville; "national and local experts said the levels of uninsured patients, uncompensated care and declining patient volume for elective procedures are problems across the country" (Ungar, 3/10).

WLKY Lousville: "Congressman John Yarmuth said the layoffs are the result of a damaged health care system and, in a statement, called for reform. 'Until we enact changes to our health care system that provide people with access to better, more affordable coverage, I fear we will face additional losses here in Louisville,' Yarmuth said." WLKY reports that Jewish-St. Mary's customers are increasingly uninsured. Currently "about 900,000 Kentuckians are without insurance but many are being treated in Jewish-St. Mary's facilities" (Roby, 3/11).

In a separate article, the Louisville Courier-Journal reports that the cuts do not represent a downturn in the overall economic viability of the local health industry. "The 13-county Louisville metropolitan area gained roughly 1,300 health-care jobs last year, federal figures show — while most sectors of the local economy lost jobs. … And officials said that while they regret the hurt to the roughly 250 employees Jewish will lay off, those lost jobs will be more than offset in the local economy by additions at other health care firms, as well as other businesses" (Howington, 3/10).

A report in New Jersey's Star-Ledger reveals that hospitals in New Jersey are feeling the economic pinch as well. Hospitals are being hurt by the lack of reimbursement for certain procedures, hospital closings that lead to overcrowding at nearby hospitals and New Jersey's "charity care, where New Jersey hospitals are mandated to treat those without insurance," they report. Richard Miller, Virtua's president and CEO says that "40 to 50 percent of hospitals today are losing money and things they used to depend on to cover shortfalls just aren't there anymore because of the recession."

Robert Wise, CEO of the Hunterdon Healthcare System says a mandatory health insurance plan, like the one proposed in the congressional health overhaul bills, would help this economic situation. "As much as there may be some reduction in reimbursements for Medicare in the federal health plan, the offsetting savings, or at least the offsetting revenue that we would receive from insurance coverage of those who are now uninsured, would be an important additional revenue source for a community hospital like ours," said Wise (Tsai, 3/11).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.