Healthcare reform is a topic of ongoing concern. Many people are without health insurance and can’t afford the cost of healthcare. Providers are also struggling to provide services on a limited budget. The industry is performing an epic balancing act of providing services and making a profit. The local doctors office isn’t the only entity hurting, hospitals are also working to keep their doors open. Nearly one quarter of Massachusetts hospitals reported a loss last year and several are at risk for closing. Among the worst hit are hospitals that provide services to low-income patients using Medicare and Medicaid.
Budget Cuts Reduce Services
Hospitals that provide healthcare services to low-income patients rely on payments from Medicare and Medicaid. Over half of all revenue for these hospitals comes from these public funding sources. Washington has been cutting the Medicare and Medicaid budgets each year, reducing the amount of coverage for and the amount of payment the provider gets for their services. The budget cuts are not just effecting patients and providers, but many training hospitals are also expected to be hit by reduced funds. The quality of training for new doctors at these hospitals is being questioned as a result of budget cuts.
Despite the enormous bill you might receive as the result of a trip to the emergency room, hospitals are not profiting as you would think. In fact, many hospitals are experiencing high debt burdens and are barely remaining in operation. Two Massachusetts hospitals that have been in operation for over 120 years recently filed for bankruptcy protection. The budget cuts, along with the high cost of labor and supplies have combined to produce financial stress on our major healthcare facilities. Aging facilities that need renovation and an increased demand for technological advances within the facility are pushing more hospitals towards lenders. The hospitals are borrowing money to keep up with patient demands at a cost higher than they can afford to repay. In efforts to fight against economic woes, many hospitals are teaming up to try and consolidate costs and demand larger reimbursements for costs from the government. This solution has, so far, proved worthy as hospitals continue to fight for fair treatment in practice.