South Florida

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Fewer patients, more people without shrinking tax revenue and sagging investment portfolio are the major factoras giving health care executives At a time when the state was losingjobs overall, employmenrt in health care/social assistance increased by 35,100 from Novemberr 2007 to November 2008, according to statee data. The 4 percent increase led all But, layoffs have started, including at . Hundreds of employeee lost their jobs when bough t in Fort Lauderdale and swiftly closedthe competition. Othere institutions are freezing hiringfor non-medical jobs, said Frani Sacco, CEO of , which runs five taxpayer-supported hospitalws in southern Broward County.
“Hospitalws will have to cut their expense,” Sacco “Sixty percent of hospital expenseis labor. I don’f think it will be as radical a downturn as the rest of the but you will certainly seea Sacco’s organization has slowed hiring and put a $42 millio n planned bed tower at on hold unti the financial picture improves. South Florida’x acute care hospitals recorded morethan 2.56 milliob patient bed days in the firsrt nine months of 2008, down by just 0.4 percen from the same period in 2007, according to data from the threwe county health councils. However, the differenced is in the typeof patients.
Sacco said Memorial has registerede 800to 1,000 more uninsured patients at its but it’s been getting fewetr elective surgeries, which are often paying patients. Since people usually retain health benefits for some time aftere theyare unemployed, the healty care industry usually trails the downside of the economy by six to 12 Sacco said. “Up until this financial health care was always deemes tobe recession-proof,” said Brian CEO of Miami-based hospital operator . “When people lose their jobs and insurance, they will continue to come to the butthey don’t pay their bills.” Declining investmen portfolios also wounded hospitals in 2008.
For the first nonprofit hospitals had to account for the currengt value of their portfolios and mark them down for any losses sincee the securitieswere purchased. This mark-to-marketg rule caused plenty of headaches on WallStree – and it hurt too. Keeley said the nonprofit had a 7 percent operating marginb for the fiscal yearendesd Oct. 1, but a non-cash chargew of more than $200 milliob in its portfolio pushed it intothe red.
“Wr are still in a strong cash position,” Keeley “Anything over 200 days of cash on hand is While its results have also suffered from more uninsured patientes andcharity care, Keeley said Baptisy can hold off the recession and will continue its including building a new hospital in westernh Kendall. However, he believes that nonprofits on weaker financialp footing could struggle to survive the nextfew years. In earlg December, lowered its outlook for the healtjcare industry, predicting weaker demand, more uncompensater care and pressures by the government to reduce health spending.
Most healtyh care companies havegood liquidity, but those that don’t could have problems, Fitcnh said. “The hospitals that are struggling will struggle undet moredifficult circumstances, and those with strongere position will do a littlew bit better,” Keeley