Health Care and the Economy
William D. PetasnickPresident and CEO, Froedtert Hospital
In 2009, we may all expect to be shaped by significant national changes, including a shifting political landscape and the economic downturn. As newly elected leaders prepare for new roles, economic conditions will demand attention and influence available opportunities. Their choices will hold implications for individuals, families, businesses and organizations.
A widely held, but incorrect view is that healthcare providers are immune to the ebb and flow of the economy. In fact, we face many of the same challenges as businesses, especially service providers.
Hospitals are already experiencing economy-related changes. Patients are putting off elective procedures and non-emergent care. More people are seeking treatment in emergency rooms. And, increasingly, they need help paying for care.
As the unemployment rate climbs, more people rely on safety net programs like Medicaid. Yet, under Medicaid, payment for care fails to cover the cost of delivering it. At the same time, governments face falling sales and income tax collections and the rising cost of higher enrollment in safety net programs. Policy-makers need to find ways to balance budgets, and this may mean further cuts to Medicaid payments.
These trends combine to reduce dollars available to pay for current hospital operations and facility, equipment and technology needs. At the same time, the nation’s financial crisis makes it harder and more expensive to borrow money.
While we know we face tough times, these challenges are not insurmountable. Together with business and community leaders who comprise our board of directors, we have worked hard to position Froedtert Hospital to succeed even in hard times. Our hospital is a significant community asset, and continued stewardship is essential.
As we begin a new year, we’ll focus on building a strong future by continuing conservative finance practices, gaining operating efficiencies and growing targeted areas. Our past successes and disciplined approach position us well for challenges that lie ahead.
Source: Froedtert Today
Date: December 2008