Hospitals saw debt per bed rise 35% from 1996 to 2000, according to a report released today by Solucient, a healthcare data company based in Evanston, Ill.
The report, "The Comparative Performance of U.S. Hospitals: The Sourcebook," blames the rise on an 11% increase in hospital operating expenses, decreased reimbursements and returns on investment, and more use of credit.
For many hospitals, "accessing capital in the long run may not be that simple," says Jack Wheeler, professor of health management and policy at the University of Michigan School of Public Health and a Solucient advisor, in a release.
"The good news for hospitals currently in need of capital financing is interest rates are low; the bad news is hospital credit ratings have been deteriorating," Wheeler says.
The report says drug spending represented a large part of the increase in expenses--up nearly 26%--and expenditures on imaging technologies rose nearly 20%.
With these increases, it says insufficient money went into improving hospital plants. The average age of plants increased nearly 9% from 1996 to 2000, the most rapid increase during any five-year period, the report says.
It says large, urban and teaching hospitals have the greatest need for increased capital because they tend to have the oldest plants, highest debt-financing needs and lowest cash-to-debt ratios.