News | December 09, 2008

Survey Shows 74 Percent of Hospitals Are Taking Measures To Avoid Fiscal Crisis

December 10, 2008 - Nearly nine in 10 hospital executives believe the current economic crisis will impact their facilities more heavily than the downturn of 2001-2002, according to a survey released yesterday by CSC titled, “Treatment Plan: Hospitals Respond to the Economic Crisis.”

The impact is already being felt and 55 percent of hospitals have seen cuts in revenue from Medicaid payments and many are beginning to prepare for increases in uncompensated care.

With the economy weighing heavily, 74 percent of hospitals surveyed have begun implementing changes to respond to the crisis, while 20 percent are in the planning stages of responding. Some of these changes have been made to capital investments. The survey showed 60 percent of respondents are delaying or deferring future construction, 55 percent report delaying or deferring future information technology (IT) 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. “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.”

The study indicates 15 percent of hospitals surveyed have accelerated IT projects in hopes that the effective use of information will help deal with new patient demands and changing reimbursement cycles while concurrently improving the quality of care. At the same time, 75 percent claim that they will be cutting costs, while 59 percent will be taking the downturn as an opportunity to tighten up their revenue cycle management. Only 43 percent plan to lay-off staff, 21 percent anticipate cutting services and fewer than four percent see the need to close facilities.

One of the largest factors expected to affect hospitals and health networks is the manner in which patients pursue care. Increased cost of living, tightening credit and the job market are creating a “perfect storm” where the uninsured patient base rises and insured patients look for a greater “bang for their buck.” Of the hospital executives surveyed, 67 percent expect to see an increase in emergency department visits, while 58 percent expect to see fewer routine checkups. Half of the executives interviewed expect to see fewer patients coming back for follow-up care.

CSC conducted 54 interviews with hospital and health network executives during the latter half of November, with 94 percent at the C-level. Nearly 50 percent were chief executive officers, chief financial officers or chief operating officers.

CSC’s Global Healthcare Sector, which serves healthcare providers, health plans, pharmaceutical and medical device manufacturers, and allied industries around the world, is a global leader in transforming the healthcare industry through the effective use of information to improve healthcare outcomes, decision-making and operating efficiency.

For more information: www.csc.com

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