Changes in Health Insurance Push Hospitals Towards Falling into the Red

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Written by Heather Legg Lets Get Our Hospital Out of the Red Though careers in health are still growing at a pretty swift rate, a number of hospitals...

Written by Heather Legg


Let’s Get Our Hospital Out of the Red

Though careers in health are still growing at a pretty swift rate, a number of hospitals themselves seem to be struggling a bit.

From for-profit to public to non-profit to private, hospitals are finding themselves closer to the red than is comfortable. One big reason for this is the troubles seen in the country’s economy lately, along with the changes in health insurance and Medicare.

Economy and Health Insurance

As the country’s economy dipped over the past few years, more and more people lost their health insurance, or else it simply doesn’t cover as much. Because of this, hospitals are seeing less elective surgeries and other procedures that aren’t necessary.

People are more apt to visit a doctor or have elective procedures and surgeries if their health insurance will cover it.

With more limited coverage or no coverage at all, the rate of surgeries goes down, therefore the hospitals are not gaining the income that they normally would in this area.

Changes in Health Insurance

People are seeing changes in health insurance, whether it’s higher deductibles or higher copays and coinsurance, and this can deter them from visiting the hospital, not just having elective surgery as stated above.

Unfortunately, if people wait longer to visit a doctor due to insurance limitations, health problems can get worse leading to even bigger issues.


Supposedly, hospitals should have full reimbursement from Medicare patients. However, this is not always the case, and many hospitals actually find themselves losing money in this capacity.

With the growing number of baby boomers and elderly patients on Medicare, it’s becoming more of an issue and financial concern.

In a Forbes piece on Medicare and the loss of money regarding hospitals, physicians are seeing less reimbursement from Medicare patients, causing them to lose money.

Because of this, many doctors and hospitals are beginning to drop or limit Medicare patients, which it turn makes it very tough for these seniors to get the medical care they need.

The other problem with this is that it causes private insurance rates to go higher to cover the loss of Medicare patients. The other option is for hospitals to cut costs.

Hospitals Needing to Cut Costs

When hospitals need to cut costs, everyone suffers.

Staff positions are cut, therefore the doctors and nurses can become overworked and overstressed. Even areas like research and tracking changes in health care and common illnesses like the flu are at risk for being cut.

• Hospitals also lose a lot of money to readmissions, which could be saved by keeping patients until they are ready to leave, preventing costly readmissions.

• Money is lost when higher skilled and higher paid staff performs tasks that others could do for less money. It’s important to match skill to dollar, especially when watching a budget.

It’s a tough time for everyone these days, even hospitals.

With changing laws and policies, other changes may ensue.

Hopefully they will turn around for the better and society won’t experience deficits in the needed realm of hospitals and healthcare.


About the Author

Heather Legg writes on topics related to small business, frugal living and financial software.



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