Also under the category of “recession proof” industries, the American Hospital Association reports financial figures that appear to contradict the fears among analysts and administrators that widespread joblessness would trigger a financial downward spiral for hospitals in 2008. The AHA's closely watched annual guide to hospital statistics reports that in 2008 the nation's 5,010 community hospitals ended the year with $17 billion in profit on net revenue of $643 billion, for a profit margin of 2.6%, driven mainly by increases in operating revenue. Though other industries might envy registering a positive margin that year, 2008 holds the lowest profits in at least 15 years for hospitals.
The spike in uncompensated care that was expected last year as a result of the recession fails to materialize. An annual survey from the American Hospital Association shows U.S. community hospitals in 2008 provided $36.4 billion in uncompensated care, which includes both charity care, for which the hospitals did not expect to receive payment, and bad debt, for which hospitals failed to recover their expenses. The figure was up 7% from the year before. But since overall hospital expenses also grew by 7%, uncompensated care accounted for roughly the same proportion of hospitals' overall expenditures as the prior year—5.8% of all expenses. The amount of total hospital expenses devoted to uncompensated care industrywide has remained between 5% and 6% for about a decade.
A Denver arbitrator rules that the Sisters of Charity of Leavenworth cannot buy out its partner in the joint-operating agreement for Exempla Healthcare for $311 million. In a binding ruling criticized by some healthcare lawyers, the arbitrator decides that the other co-sponsor in the three-hospital system, Community First Foundation, could not sell its interest because it did not have an interest to sell—rather, the local community owned the not-for-profit hospitals in question.
Healthcare labor unions are prodded sharply by the Obama administration to stop their infighting and speak with a common voice for workers. The year sees the creation of the nation's largest registered nurse-only union called the National Nurses United, the formation of a new federation from six state nurse associations, and an affiliation between two previously bitter rivals, the Service Employees International Union and the California Nurses Association/National Nurses Organizing Committee. Yet all the cooperation fails to produce the results that labor leaders sought, including passage of the Employee Free Choice Act “card check” rules, inclusion of single-payer legislation in healthcare reform proposals, or any notable surge in healthcare union numbers.
For the first time in years, hospitals across the country also report that their nursing shortages have greatly eased or even reversed during the recession as new graduates from nursing schools find the job market much tighter than they had thought. Observers say the recession has caused many more nurses to stay in the workforce, either to maintain second household incomes or to delay a planned retirement because of investment declines.
Martin Memorial Health System, a 316-bed provider in Stuart, Fla., wins a nationally watched lawsuit in a dispute that pitted the mandate for hospitals to provide free care to the indigent against the rights of illegal immigrants. The system won the lawsuit after a jury found that administrators were not liable for damages for deporting a brain-damaged Guatemalan illegal immigrant back to his native country instead of providing for his indefinite rehabilitative care in the U.S.
The American Hospital Association, citing the need to cut expenses, eliminates the positions of four key employees, including the jobs of Jim Bentley, senior vice president of strategic policy planning, and Richard Wade, senior vice president of strategic communications.