More proof this just wasn't a bailout of rich people as some of you have spewed...er "claimed".
Disappearing Credit Forces Hospitals to Delay Improvements
By REED ABELSON
In late August, even before the credit squeeze reached a full state of crisis, a hospital system in Hawaii filed for bankruptcy reorganization after a lender failed to extend a loan for another month.
By September, a nonprofit hospital in Philadelphia found it could not borrow money through a traditional bond offering because the municipal bond market had come to a virtual halt.
And now, a hospital system in Minnesota says it plans to delay some new buildings, while another hospital group in Connecticut has decided to postpone the replacement of an emergency room. Other hospitals around the country say they are thinking about deferring the purchase of expensive new equipment like computer systems or multimillion-dollar M.R.I. machines.
The hospital industry, in other words, is among those struggling with the credit scarcity that the federal government’s latest financial bailout plan is meant to alleviate. And lending relief, if it comes, cannot come too soon.
Hospitals “are not immune,” said Richard L. Clarke, chief executive of the Healthcare Financial Management Association, a professional group for hospital finance executives. He noted that hospitals, like any other business, relied on credit for building projects and to maintain overall liquidity.
Tight credit is adding to a financial challenge that some hospitals are already facing, as greater numbers of patients are unable to afford the rising out-of-pocket portions of their medical bills or lack insurance altogether. Many hospitals say they are already seeing an increase in their bad debt — money they bill patients for but cannot collect.
And that problem could get worse, as people worry first about paying their mortgages and credit card bills before dealing with their medical bills, said Gary Taylor, a hospital analyst at Citi Investment Research. “We’re worrying about collection rates falling,” he said.
Despite the stereotypical notion of health care as recession-proof, hospitals worry that if the financial crisis leads to a severe economic downturn, they will feel deep pain. Many are already cutting budgets.
And that hunkering down by hospitals could have a ripple effect on suppliers of medical equipment like General Electric and Siemens, not to mention the construction industry, analysts say. The labor market could take a hit, too. As major employers, hospitals had been among the bright spots in the country’s job statistics, but their hiring is also starting to slow.
For hospitals, the current financial environment stands in stark contrast to the recent past. After years of heavy capital spending on new and improved equipment and buildings, outlays that were driven by easy access to credit from banks and bond markets, many hospitals have scaled back their ambitions as they scramble to protect their cash positions.
“Suddenly, the rug is getting yanked out from under them,” said Patrick Smyth, a consultant at Kurt Salmon Associates, which advises hospitals.
http://www.nytimes.com/2008/10/15/business/15hospital.html?em=&pagewanted=print
Originally posted by uzlessBoohoo. More businesses that ran up too much debt and now can't pay it without amassing even more debt. Did anyone ever hear of retained earnings?
More proof this just wasn't a bailout of rich people as some of you have spewed...er "claimed".
Disappearing Credit Forces Hospitals to Delay Improvements
By REED ABELSON
In late August, even before the credit squeeze reached a full state of crisis, a hospital system in Hawaii filed for bankruptcy reorganization after a lender failed to extend a loan fo ...[text shortened]... ospitals.
http://www.nytimes.com/2008/10/15/business/15hospital.html?em=&pagewanted=print
From the article: "This year, the Hawaii center bought two hospitalsand lined up a $12 million revolving line of credit from Siemens Financial Services, which it said was secured by accounts receivables — the money owed to the medical center from insurers and patients. Hawaii said it had been meeting the monthly interest payments of $40,000 or so on the loan, but in August, Siemens was unwilling to extend the credit any further."
Expanding in a bad economy when you have insufficient cash reserves is a recipe for failure. Bad business decisions get punished in a capitalist economy. Them's the breaks.
Originally posted by no1marauderI hope you don't require medical attention at one of these facilities
Boohoo. More businesses that ran up too much debt and now can't pay it without amassing even more debt. Did anyone ever hear of retained earnings?
From the article: "[b]This year, the Hawaii center bought two hospitalsand lined up a $12 million revolving line of credit from Siemens Financial Services, which it said was secured by acc ...[text shortened]... for failure. Bad business decisions get punished in a capitalist economy. Them's the breaks.[/b]
Originally posted by MerkThis is why there need to be enough government-run hospitals so that everyone can have free healthcare. That's how it works in most of the 36 countries that have a superior healthcare system to the US.
Me too. Hospitals that can't pay their bills don't usually have the best equipment or the best staff.
Originally posted by MerkHospitals that make good business decisions tend to have more money for better equipment and
Me too. Hospitals that can't pay their bills don't usually have the best equipment or the best staff.
staff. Having the government bail them out only lets a bad business hang around longer. Why
would you want to support a bad hospital?
Nemesio
Originally posted by NemesioWhat makes you think a hospital caught in the credit squeeze is running a bad business? Do you have any idea how much equipment and renovations cost? Do you think "well run" hospitals just pay for this stuff in cash?
Hospitals that make good business decisions tend to have more money for better equipment and
staff. Having the government bail them out only lets a bad business hang around longer. Why
would you want to support a bad hospital?
Nemesio
Come on man.
Originally posted by NemesioShould turning a profit be a hospital's raison d'être ?
Hospitals that make good business decisions tend to have more money for better equipment and
staff. Having the government bail them out only lets a bad business hang around longer. Why
would you want to support a bad hospital?
Nemesio
Originally posted by NemesioHow did you come to the conclusion that I want to bail out a bad hospital?
Hospitals that make good business decisions tend to have more money for better equipment and
staff. Having the government bail them out only lets a bad business hang around longer. Why
would you want to support a bad hospital?
Nemesio