The portion of hospital operating expenses earmarked for capital improvement fell 17% over the past six years, according to healthcare information firm Solucient, which said the trend might be about to reverse. Operating expenses allocated to capital improvement dipped to 7.5% in 2003 from 9% in 1997. "Our findings suggest reduced margins in U.S. hospitals are making it difficult for facilities to fund key investments in plant, equipment and technology," said Kaveh Safavi, chief medical officer at the Evanston, Ill.-based firm. Hospitals in the south-central region -- which includes states such as Kentucky, Mississippi and Texas -- increased capital expenditures in 2003, which Safavi said could predict a national shift. "Recent surveys have concluded that many hospitals have started or plan to significantly increase their investment in capital projects over the next several years," Safavi said. "However, given the current limited revenue sources for hospitals, this will still be a significant challenge for many healthcare providers." -- by Mary Chris Jaklevic
Past six years bad for capital improvements: study
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