Regardless of financial status, the recent economic recession affected hospitals across the nation. But following the rebound, financially weak and safety-net hospitals continue to struggle, say the health researchers. "Poor financial outcomes [for hospitals] could lead to poor care," said Naleef Fareed, assistant professor of health policy and administration, Penn State.
"This is an issue that needs attention as health care reform moves forward." Fareed and colleagues used data from both the American Hospital Association Annual Survey and the Centers for Medicare and Medicaid Services to analyze how different groups of hospitals fared financially during the recession, and where these groups stand as health care reform continues in the United States. "The effect of the recession wasn't permanent," said Fareed. "Hospitals recovered from the recession, but those that were initially financially weak before the recession remained in a precarious condition through 2011." The researchers looked at nearly 3,000 privately owned hospitals from 2006 through 2011.
Included in the study were both for-profit and nonprofit hospitals, as well as safety-net and non-safety-net hospitals. "A safety-net hospital provides an unusually high amount of care to the poor and vulnerable population," said Fareed. He pointed out that many factors could be linked with a hospital being a safety net. At the beginning of the study period, more than half of the hospitals were considered financially strong while about a quarter were financially weak. The remaining hospitals fell in the "financially mixed" category. All three of these categories of hospitals experienced a financial dip in 2008, but by 2011 financial status was comparable to the 2006 baseline for all three. About 28 percent of the safety-net hospitals were financially weak in 2006. While their financial performance dipped in 2008, these institutions rebounded by 2011.