Hospitals Hurting

There’s the morbid joke in health care... of job security. People will always get sick. And the industry has been one of the strongest engines of the Massachusetts economy recently – adding jobs - as so many other sectors have been taking their lumps. But now there’s growing evidence the state’s nine billion dollar health care industry is not so healthy. Especially hospitals. And that’s unwelcome news in a state where more than a half million people work in health care.

Story transcript:

CURT NICKISCH: Steve Tringale runs a health care consulting firm in Boston. In his thirty years in the business, he’s never seen anything like this:

STEVE TRINGALE: The factors which are driving the overall economic downturn have conspired in some ways to almost set up a perfect storm for hospitals.

NICKISCH: There are four main factors contributing to this storm. First, the state budget is tightening. So far the Commonweatlh has cut up to two hundred fifty million dollars in reimbursements to hospitals. The second factor is more of a surprise. People are foregoing medical care just to save money.

I go down one leg at a time, because I don’t like to put a lot of stress on my left leg.

NICKISCH: Wally Glendye is on his back porch in Middleboro, letting out his dog. He has a bad knee. It hurts, especially when the weather’s cold.

WALLY GLENDYE: It’s been tough on the kids. I can’t throw a ball to them anymore, I can’t bend down to pick it up.

NICKISCH: Glendye’s up for knee replacement surgery. But he’d have to shell out for co-pays and a deductible, which he says he can’t afford in this economy.

GLENDYE: It’s just the wrong time to spend money, I mean it is! If it was better, absolutely! That’s what I would do, but- it’s not the time to play around. Not at all. No. No.

NICKISCH: Money’s not the only reason that people like Glendye are putting off care. Karen Nelson with the Massachusetts Hospital Association says it’s also psychological:

KAREN NELSON: The economy is so lousy, patients are deferring elective procedures - they’re afraid to leave their job! To be out for two or three weeks, and then to come back to find a pink slip.

NICKISCH: It’s not only elective procedures that are down. The American Hospital Association says at a time when its members were counting on an older population needing more care, patient admissions are falling, too.

At Tufts Medical Center in Boston, this is all magnified by the other factors in this storm. As the economy weakens, people lose their jobs, and their employer health insurance. Even with the universal health care law in Massachusetts, people still have to pay co-insurance and deductibles. Tufts CEO Ellen Zane says these have gotten bigger, and many patients are not paying up.

ELLEN ZANE: Basically, just more out of pocket expense, and with that, we are seeing more bad debt.

NICKISCH: About five-percent more. It’s one reason a third of Massachusetts acute care hospitals have gone into the red so far this year.

Then there’s the fourth and final factor in the storm: the credit crunch. It’s more expensive to borrow money to build a new wing or buy better equipment. And the financial crisis is also taking hospital endowments down with the stock market. CEO Zane says Tufts uses its investment gains to fund medical research.

ZANE: When there are no gains, it’s hard to support it! And it means that the clinical part of our enterprise has to, what I always say, speed up the treadmill.

NICKISCH: That means asking workers to do more, while Tufts cuts back on hiring. Zane has put expansion plans on hold, and is also urging doctors to cut travel for their medical research.

Changes like these are becoming common at hospitals across the state. Some are going further. Boston Medical Center has laid off two hundred fifty workers. Mass General has cut two hundred jobs. Medical centers say they are saving money without hurting quality of care. Health care consultant Steve Tringale agrees. But he says medical campuses are going to come out of this unprecedented recession in worse financial and physical shape.

TRINGALE: Hospitals need new heating systems, new chillers, OR’s need to be rehabbed, buildings need to be maintained, things like that.

NICKISCH: Tringale says the state’s hospitals could get a helping hand from the new administration. President-Elect Obama’s transition team says an economic stimulus package might include a boost to federal Medicaid dollars... a welcome vital sign, in what’s looking like a weak, bleak 2009.