Healthcare In Crisis: Survey: Hospitals say this recession is worse

Wednesday, December 17, 2008

Survey: Hospitals say this recession is worse

Eighty-five percent of hospital executives are bracing for a far worse impact from this recession than the 2001 to 2002 downturn, according to a survey released by CSC.

For some, the impact is already evident.

Fifty-five percent of hospitals have seen cuts in revenue from Medicaid payments. And 74 percent of hospitals surveyed have started making operational changes to react to the economic crisis, while 20 percent are in the planning stages of responding.

Falls Church, Va.-based CSC (NYSE: CSC) conducted 54 interviews last month with mostly C-level hospital and health network executives. Nearly half were chief executive officers, chief financial officers or chief operating officers.

In terms of what wallet-tightening initiatives are under way, 60 percent report delaying or deferring future construction, 55 percent are doing the same for upcoming information technology projects and 38 percent have postponed IT expansions already underway.

“The economic environment, exacerbated by the credit crisis, has put the healthcare industry in uncharted waters,” said Deward Watts, president of CSC’s global healthcare sector, in a statement. “The industry’s quick response to this challenge is encouraging, but tough times lie ahead. Hospitals that address changing patient demands and shifting reimbursement cycles will be better positioned to mitigate the downturn.”

Of the executives surveyed, 67 percent expect to see more visits in the emergency department, while more than half expect to see fewer patients making appointments for routine checkups.

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Statistics Collection

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