During past recessions, the financial stability of hospitals seemed to be nearly indestructible. But researchers at the University of Michigan Health System and St. Joseph Mercy Health System say the current national economic crisis may be an exception.
Hospitals are reporting declining profits, likely as a result of Americans losing health insurance as they lose jobs. As a result, hospital plans for renovation and new construction are being scrapped, and hospitals are being forced to reduce hospital staff, according to an analysis in the just-released May/June issue of the Journal of Hospital Medicine.
The researchers speculate hospital cutbacks may risk the quality and safety of health care delivery, and urge the federal government to improve public awareness of overcrowding emergency services, nurse-to-patient ratios and use of information technology.
The medical industry used to cruise thru recessions little affected. But with medicine now over 17% of GDP and rising it is just too large a pie slice to remain immune to downturns. Governments can't afford to fully compensate for declines in private sector spending.
We aren't many years away from the point where medical spending will actually drop from one year to the next. An approaching shock to the economy will cause a large enough economic contraction that per capita medical spending will fall in spite of an aging population and in spite of more government intervention in health care.
|Share |||By Randall Parker at 2010 June 13 11:19 PM Economics Health|