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Hospitals eye ailing economy, planning for tougher times

The downturn in the economy and recession concerns are affecting all business and industry, but perhaps none more than healthcare. Already with tight margins, state hospitals are planning for bad times ahead, tightening their belts and anticipating a rise in accounts receivables, among other effects.

Sam Cameron, president and CEO of the Mississippi Hospital Association (MHA), says his members are eyeing the ailing economy with concern, and are planning for an increase in the amount of uncompensated care they provide as people lose jobs, incomes and insurance coverage.

“We definitely see an uptick in the amount of uncompensated care, treating people with no insurance or ability to pay, during times like these, Different hospitals will use different gauges, but it definitely is putting stress on our hospitals.”

Can hospitals expect a rise in emergency room traffic as people lose jobs/insurance and use the emergency room as a clinic? Or will people forego treatment because they don’t have the money to pay?

Complicated diagnosis

Althea Crumpton, administrator of Magee General Hospital in Simpson County, says both can be expected. She, indeed, anticipates a rise in emergency room traffic, and at the same time anticipates a drop in other services as people delay or cancel treatment. And she foresees all of that causing collection problems.

Lance Moak, administrator of Franklin County Memorial Hospital in Meadville, which is licensed for 36 beds, 24 of them acute care, agrees.

“People who are already using the emergency room as a clinic will continue to do so,” he says. “People who don’t are going to forego treatment until their illness worsens, which will cost more to treat in the long run.”

Both Crumpton and Moak oversee rural hospitals located in counties where personal income is not high. Cameron says the effects of a shaky economy can vary from hospital to hospital and region to region.

“A hospital in the Delta may see more of a problem than, say, a hospital in Northeast Mississippi,” he says.

Bad-tasting medicine

Measures to combat the potential effects of a shrinking economy vary, as well. Cameron says all of MHA’s members are affected, however. It is just that some have more capacity to deal with a downturn than others.
At Magee General Hospital, which is the only hospital in Simpson County and serves residents of adjacent counties, as well, it is allowing for a rise in collection problems in their budgetary process. Calling it “booking up bad debt,” Crumpton says the hospital is forecasting a rise of two percentage points in accounts receivable. She adds that she is fairly confident that Magee General Hospital, which has been in operation for approximately 70 years, will not have to slash its staff or discontinue services in order to stay in out of the red.

“Over the years, we have built a strong medical community, and I don’t see much slowdown,” she says.

Moak is not as optimistic. He says Franklin County Memorial Hospital, which operates a two-bed emergency room, is already thin in terms of staff. He says the hospital currently has the staff to meet the state’s minimum requirements. Any staff cuts would necessitate a discontinuance of service.

“I am extremely nervous,” Moak says.
Moak says his concern has grown since late last year as he watched the economic news worsen. And he decided to act — personally.. In October, he announced he was reducing his own salary, and he encouraged his staff to do the same if possible.

Contact MBJ staff writer Wally Northway at wally.northway@msbusiness.com.


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