Recession Strategies for Healthcare Travelers
We keep hearing the mantra "Healthcare is recession proof. It's the one bright spot in a dark economy". Indeed, according to the U.S. Bureau of Labor Statistics (BLS), healthcare employment rose by 32,000 new jobs in December 2008 alone. This breaks down to 14,000 jobs gained in ambulatory services and 12,000 new workers hired in hospitals. In all of 2008, healthcare added 372,000 new jobs. But despite these impressive statistics, the recession is taking its toll on U.S. hospitals and these rosy numbers may in fact bode poorly for travelers. Here are the facts:
Hospital revenue has decreased. According to a report from the American Hospital Association (AHA), nearly 40 percent of 736 hospitals surveyed reported a drop in admissions. Why? The total number of jobs lost in the recession so far totals a staggering 2.59 million. As the pink slips fly, families are losing vital health coverage and are forced to make tough choices about their family budgets - including postponing needed healthcare. Even if still employed, many workers are finding their insurance coverage is being eroded. Deductables and co-pays are rising. Most of the hospitals surveyed reported the double whammy of declining admissions and an increase in patients unable to pay for their care.
Investment income has tanked. Like most institutions, hospitals rely on investment income to make ends meet. But the recent fiasco in the stock market has turned endowment income into losses.
Credit has tightened. The financial meltdown has also increased the cost and availability of borrowed money that hospitals use to finance facility and technology upgrades. Uncertain access to capital has cancelled or postponed many plans for expansion.
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