Hospitals and the Economy Anne McLeod Vice President, Finance - - PowerPoint PPT Presentation
Hospitals and the Economy Anne McLeod Vice President, Finance Policy California Hospital Association Hospitals and the Economy American hospitals are financiall financially challenged and the challenged and the trends in revenues and
Anne McLeod Vice President, Finance Policy California Hospital Association
Hospitals and the Economy
“American hospitals are financiall challenged and the financially challenged and the trends in revenues and expenses will put and even greater burden
y y p and their ability to fund capital projects”
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projects
Hospitals and the Economy
7.0% 8.0%
Unemployment Rate (Non-farm), 2007-2008
5 0% 6.0%
nemployment
4.0% 5.0%
% Un
3.0%
Jan- 07 Feb- 07 Mar- 07 Apr- 07 May- 07 Jun- 07 Jul- 07 Aug- 07 Sep- 07 Oct- 07 Nov- 07 Dec- 07 Jan- 08 Feb- 08 Mar- 08 Apr- 08 May- 08 Jun- 08 Jul- 08 Aug- 08 Sep- 08 Oct- 08 Nov- 08 Dec- 08
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Source: Department of Labor, Bureau of Labor Statistics, Labor Force Statistics. (2008). Access at: http://www.bls.gov/oco/cg/cgs035.htm.
Hospitals and the Economy
Unemployment Rates - Seasonally Adjusted
12.0%
C lif i
10.0%
California
6.0% 8.0%
United States
4.0%
J a n 8 F e b 8 M a r 8 A p r 8 M a y 8 J u n 8 J u l 8 A u g 8 S e p 8 O c t 8 N
8 D e c 8 J a n 9 F e b 9 M a r 9 A p r 9 M a y 9 J u n 9
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M A M A N D M A M
Hospitals and the Economy
Percent of Population with Employer-sponsored Insurance (ESI) and Medicaid
63% 64% SI 13% 14% icaid ESI Medicaid 61% 62% ation with ES 10% 11% 12%
58% 59% 60% % of Popula 7% 8% 9%
57% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 6% 7% % o
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Source: Current Population Survey, U.S. Census Bureau. (2008). Access at: http://www.bls.gov/oco/cg/cgs035.htm; and Fronstin, P. (November 2005). Sources of Health Insurance Characteristics of the Uninsured: Analysis of the March 2005 Current Population
Hospitals and the Economy
States with Budget Gaps in FY 2009 or Projected for FY 2010 States with Budget Gaps in FY 2009 or Projected for FY 2010
FY09 and/or FY10 Budget Gap No Budget Gap 09 a d/o udget Gap
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Source: McNichol, E., and Lav, I.J. (23 December 2008). State Budget Troubles Worsen. Washington, DC: Center on Budget Policy and Priorities.
Hospitals and the Economy
Percent of State Spending by Function Percent of State Spending by Function Total Spending $1.46 Trillion
All Other, 40% Medicaid, 21% Higher Education, 10% Transportation, 8% Elementary & Secondary Education, 21%
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Source: National Governors Association and National Association of State Budget Officers. (June 2008). The Fiscal Survey of States. Washington, DC.
Hospitals and the Economy
Percent of Gross Revenue by Payer
Medicaid, 14.8% Other Government, 1.5%
y y
Medicare, 41.0% Private, 42.7%
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Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2007, for community hospitals.
Hospitals and the Economy
Hospital Payment Shortfall (Nationwide) Relative to Costs for Medicare and Medicaid 1997 – 2007
$0 $5 Medicare Medicaid
Relative to Costs for Medicare and Medicaid, 1997 2007
$15
$0 ions $30
Bill
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
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Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2007, for community hospitals.
Hospitals and the Economy
Hospital Payment Shortfall (California) Relative to Costs for Medicare and Medicaid 1999 – 2009
Hospital Unfunded Cost of Providing Services Medicare and Medi-Cal Patients 1999 - 2008
Relative to Costs for Medicare and Medicaid, 1999 2009
$Billions Medicare Medi-Cal $0 $1 0
$4.0
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'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 Year
Hospitals and the Economy
Percent of Hospitals Reporting Impact of Economic Crisis Percent of Hospitals Reporting Impact of Economic Crisis Decrease in patient admissions 51percent Decrease in elective procedures 58 percent Increase in bad debt and charity care 60 percent Increase in uninsured visits to the ER 57 percent Decrease in total margin 50 percent Significant decrease in total margin 26 percent 11
Hospitals and the Economy
Hospitals Play an Important Role in the California Economy
Impact on Wages $30 billion Direct Effect
Hospitals Play an Important Role in the California Economy
Impact on Wages $30 billion Direct Effect and Salaries $29 billion Ripple Effect $59 billion Total Contribution Imapct on $57 billion Imapct on $57 billion the Economy $89 billion $146 billion Hospital Jobs 470,001 Hospital Jobs 470,001 Effect on Statewide 582,613 Number of Total Jobs 1,052,614
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Hospitals and the Economy
California Hospitals
cannot secure capital to fund seismic mandate
California
Report a Negative
ranks
Margin
________________
in hospital bed availability f C lif i
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for Californians
Hospitals and the Economy
P t f H it l R d i E dit C it l P j t b f th Percent of Hospitals Reducing Expenditures on Capital Projects because of the Capital Crisis Beginning Early in 2008
46% 77% Scaled Back Projects Planned or Already in Process Reduced Capital Spending* 54% Decided to Not Move Forward with Planned Projects not yet Started Already in Process 14% Stopped Projects that were Already in Process
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Source: AHA. (March 2009). Rapid Response Survey, The Economic Crisis: Ongoing Monitoring of Impact on Hospitals. *Includes any hospital reporting that it had scaled back, decided not to move forward with or stopped projects planned or already in process.
Hospitals and the Economy
Percent of Hospitals Reporting a Change in Capital Plans since Capital C i i B i E l 2008
% Stopped Projects Already in Process Scaled Back Projects Already in Process D id d N t t M F d ith P j t Pl d
Crisis Began in Early 2008
25% 32% 28% 40% 34% 27% Decided Not to Move Forward with Projects Planned 8% 6% 25% 8% 6% 6% New Capacity/Renovations Clinical Technology Information Technology
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p y gy gy
Source: AHA. (March 2009). Rapid Response Survey, The Economic Crisis: Ongoing Monitoring of Impact on Hospitals.
Hospitals and the Economy
AB 1383 Governor Signed Hospital Signed Becomes Law Jan 1, 2010 Hospital Provider Fee $2 billion (annually)
Legislation
(annually) 2009-2010
Legislation expires Dec 31, 2010
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,
Hospitals and the Economy
Hospital Unfunded Cost of Providing Services Medicare and Medi Cal Patients
S l h lf f
Medicare and Medi-Cal Patients 1999 - 2008 $Billions Medicare Medi-Cal
Solves half of the Medi-Cal shortfall.
$0
$3 0
Does not resolve the
underlying problem.
$6 0
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08
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Year
Hospitals and the Economy
Where do hospitals go from here? R l f M di C l i
g
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Hospitals and the Economy
Questions A M L d Anne McLeod Vice President Finance Policy Vice President, Finance Policy (916)552-7536 ( ) amcleod@calhospital.org
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