Are US hospitals in trouble?

Many hospitals, especially more rural ones, have been in trouble for some time. More on the rural hospitals later.

“More than 33% of all hospitals are operating on negative margins, according to the American Hospital Association,” per Michael Popke of Benefits Pro in a piece called “America’s hospitals facing ‘massive growth in expenses’.” Here are two select paragraphs from the piece that tell the gist of the story.

“Hospital employment is down approximately 100,000 from pre-pandemic levels, while hospital labor expenses per patient through 2021 were more than 19% higher than pre-pandemic levels. A new report from the American Hospital Association highlights the financial and operational toll the pandemic and inflation has taken on hospitals — concluding that more than one-third are operating on negative margins.

‘Hospitals and health systems have been nimble in responding to surges in COVID-19 cases throughout the pandemic by expanding treatment capacity, hiring staff to meet demand, acquiring and maintaining adequate supplies and personal protective equipment to protect patients and staff, and ensuring that critical services and programs remain available to the patients and communities they serve,’ notes the nine-page report released this month. ‘However, these and other factors have led to billions of dollars in losses over the last two years for hospitals.’”

Per an article called “The South’s health care system is crumbling under Covid-19. Enter Tennessee” by Daniel Payne of Politico, the demise of heath care in more rural areas has been exacerbated by COVID-19.

“Rural hospital closures have been accelerating, with 181 since 2005 — and over half of those happening since 2015, according to data from the University of North Carolina. But that may be just the beginning. Over 450 rural hospitals are at risk of closure, according to an analysis by the Chartis Group, one of the nation’s largest independent health care advisory firms.”

The rural hospital concerns predate the advent of the Affordable Care Act. Too many hospitals had high percentages of indigent health care costs, meaning people without insurance. If they were not funded by a county, the hospital was at severe risk of closing. Since fourteen states have still not expanded Medicaid under the ACA, the opportunity for getting paid did not increase and many have closed. And, the patients, employees and communities suffer.

Yet, a major part of this cost dilemma existed before COVID-19. The US has the most expensive health care system in the world, but we rank around 38th in health care quality. That is a pretty poor rate of return on one’s spend. Hospitals spent too much on technologies that need to be used. There exists a correlation between the ownership of a technology and its higher frequency of use. Yet, with COVID-19 and its aftermath, fewer elective procedures and tests were done in hospitals.

These issues need to be evaluated outside of the political lens and with data. Yet, that is not bound to happen. It would at least be helpful to see more people covered with full Medicaid expansion, but that has been politicized for zero-sum game reasons, not to actually help people. It would be helpful to see Medicare expanded, at least down to age 62 from 65. As Medicare works reasonably well, I would like to see it go lower, but whatever we do, it should be evaluated on its results, not a politician’s beliefs.

If people think I am unfairly picking on politicians, it would not be a stretch to say most politicians do not know a whole lot about health care. We saw this with the atrocious “throw stuff against the wall” repeal and replace discussion in 2017 by the thirteen Republicans, which came within one vote from passing the Senate. That would have screwed about 20 million Americans. Senator John McCain gave it a thumbs down vote for its lack of veracity and its poor protocols on evaluation.

And, we saw it with the discussions and passing of the ACA, which Republicans refused to vote for which is strange since it has several Republican ideas in it from Romneycare in Massachusetts, when Mitt Romney was governor there. The ACA is not perfect, but at least we should fully implement it and shore up its deficiencies. It is only people’s lives.

11 thoughts on “Are US hospitals in trouble?

  1. Meanwhile, those of us with a universal healthcare system are grateful that profit plays only a small part in healthcare here. But it’s getting bigger, as Johnson and the rabid right sell off anything they can to their mates.

    • Clive, they top few countries in health care outcomes have national health insurance. The US system is not one to emulate. Ironically, the US Veterans Administration runs a national health care model for our veterans. When it has had difficulties is when funding is withheld for improvements and staff. Keith

      • That sounds similar to here. Our NHS has been under-funded and under-supported for years, to the point where the government has managed to turn public opinion against it as a precursor to privatisation. They have been chipping away it it for quite some time – it has been a gradual process over the past thirty years or more. With the levels of government corruption that existed during the pandemic I dread to think what they’ll do with it.

      • Clive, it is an age old problem. Cut funding to beyond painful levels, then complain when things fail. Keith

  2. This is a bit of a surprise to me. Well, not the part about rural healthcare. I get that. But in my area, we have two mega-hospitals, both “non-profit” (St. Luke’s and St. Al’s) which have both been expanding and gobbling up smaller facilities for the last 50 years. Their campuses are in a continual state of construction, their lobbies are palatial showrooms with waterfalls and all sorts of non–medical nonsense. They are local industries. Of course, neither of these hospitals pays taxes, so perhaps that is how they stay ahead of the game. They’ve gotta keep spending those profits.

    Fortunately, due to a determined ballot initiative a couple of years ago, Idaho was forced to implement Medicaid Expansion. But that is not a cure-all for low income families or for rural healthcare.

  3. it’s an atrocity Keith. My godson was lucky to get a bed after 24 hrs at the psych unit the other night and they were going to have to ship him off. Finally he and he was in horrible shape banging his head against the wall and screaming. It’s all so sad.

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