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Organizational Goals of Hospitals During Economic Downturn

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After reading the article;

The Economic Downturn and Its Impact on Hospitals (pdf), TrendWatch, January 2009

from the the American Hospital Association
http://www.aha.org/aha/research-and-trends/index.html

-How is the current economic environment affecting hospitals?
-What changes in goals and strategy are hospitals likely to employ in the current environment?
-What similarities and what differences do you see between the effects of the economic downturn on hospitals and healthcare in general compared to other industries?
-Do you see any opportunities for hospitals brought about by this economic environment?

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Solution Preview

The current economic environment is affecting hospitals in a variety of ways, and one of the primary ways in which the economic environment is affecting hospitals, is due to the fact that the cost of supplies and equipment is rising, which inevitably causes a distinct rise in the amount hospitals must charge their patients for the services that have been rendered. The rise in the costs of obtaining and maintaining supplies and equipment, as well as those costs associated with obtaining medications,have made it imperative that hospitals transfer a percentage of these costs to their patients. The increased costs of providing services to patients, have also increased the hardships that patients have in financing their health care, which invariably leads to a greater number of patients seeking to receive the services that they need from other types of health organizations, or even attempting to treat themselves through holistic methods. The reduction in the ability of patients to pay for the hospital services that have been rendered to them, has resulted in some reduction in the number of patients hospitals receive for routine services, but this reduction has not been dramatic. What has occurred due to the reduction in the ability of patients to pay for services rendered, due to the current economic environment, is that hospitals have had to invest more time and finances in obtaining the services of collection agencies, in order to assist them in collecting on outstanding patient debts. The allocation ...

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