Hospitals
Increasing joblessness troubles hospital industry
Hospital executives worry rising unemployment rates will lead to more patients unable to pay their bills.
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Tuesday, October 14, 2008
Prudent management and good luck are helping local hospitals avoid the growing national problems of interrupted construction and spiking interest rates. But nobody's avoiding the rapid shrinking of nest eggs so important to the capital-intense industry.
Hospital executives' biggest worry is that rising unemployment and falling health insurance will leave more and more patients unable to pay their bills. It's already a "huge concern," said President Bryan Bucklew of the Greater Dayton Area Hospital Association.
Good Samaritan and Miami Valley hospitals and Kettering and Grandview medical centers have $254 million in building projects under way — for outpatient surgery at Grandview and heart centers at the others. They borrowed it when credit was looser, but Kettering Health Network chief financial officer Russ Wetherell said its variable rate is up 3 points to 8 percent.
"A concern, but not catastrophic," he said, in part due to KHN's good credit rating.
Premier Health Partners' is even better, partly because of its often-criticized reserves. Its four hospitals' combined reserves were above $1 billion before five years of U.S. investment gains disappeared, CFO Tom Duncan said.
"You always want to be in this situation in case of an event like this."
Contact this reporter at (937) 225-2129 or
klamb@DaytonDailyNews.com.
