News For Thought…..Unintended Consequences Of The New Health-Care Law

Posted By on August 30, 2010

News For Thought From Dr. Joe Duarte’s Market I.Q.

Public Hospitals May Be A Thing Of The Past.

According to The Wall Street Journal: “Faced with mounting debt and looming costs from the new federal health-care law, many local governments are leaving the hospital business, shedding public facilities that can be the caregiver of last resort.” The report added: “More than a fifth of the nation’s 5,000 hospitals are owned by governments and many are drowning in debt caused by rising health-care costs, a spike in uninsured patients, cuts in Medicare and Medicaid and payments on construction bonds sold in fatter times. Because most public hospitals tend to be solo operations, they don’t enjoy the economies of scale, or more generous insurance contracts, which bolster revenue at many larger nonprofit and for-profit systems.” Finally, the article added: “Local officials also predict an expensive future as new requirements—for technology, quality accounting and care coordination—start under the overhaul, which became law in March. Moody’s Investors Service said in April that many standalone hospitals won’t have the resources to invest in information technology or manage bundled payments well. Many nonprofits have bad credit ratings and in a tight credit market cannot borrow money, either. Meantime, the federal government is expected to cut aid to hospitals.”

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