Survey: 7 N.H. hospitals in the red

Tough choices and lean operating budgets have eased the impact somewhat of the weakened economy on many of the state’s hospitals, but others could still use a shot in the financial arm, according to a recent survey.The New Hampshire Hospital Association polled the state’s 26 acute care hospitals between January and March and found that, of the 25 respondents, seven hospitals said they were operating in the red, as compared to four hospitals in the first quarter of 2009. Names of the individual hospitals taking part in the survey were not released.Some 60 percent indicated a moderate to significant decrease in operating margin in the first quarter of 2010 as compared to 52 percent, indicating a significant drop in operating margin in the first quarter of 2009.New Hampshire hospitals, taken as a group, had an operating margin of 1.9 percent in the first quarter of 2010. While this is a slight improvement from the 1.8 percent margin of the fourth quarter of 2009, it is about the same as the operating margin of fourth quarter of 2008, when the recession first took hold, and considerably lower then the 2.9 percent operating margin in the first quarter of 2009.Access to capital remains an issue with 80 percent of responding hospitals, with 72 percent indicating the situation has not changed in the last year and some 8 percent saying access has become even more elusive.Those that said terms were improving dropped to 20 percent in the first quarter of 2010 as compared to 48 percent in the first quarter of 2009.Hospitals also said they are continuing to reduce services and staff to combat their economic challenges.About 24 percent said they were making cutbacks in services versus 14 percent indicating service reductions a year ago. And 56 percent said they made cuts to staff as compared to 48 percent who indicated making personnel changes a year ago.“Our survey’s results confirm that hospitals in New Hampshire are still weathering the economic storm of the past year and a half, but they continue to serve the patients and communities who depend on them,” said NHHA president Steve Ahnen. “In a weak economy, hospitals’ role as part of the health-care safety net in New Hampshire is more important than ever.”

Clouded futureWhile things certainly aren’t rosy for New Hampshire’s hospitals, there are signs of improvement buried within the numbers.Hospitals have seen great improvement in their cash on hand figures — a metric that is often reviewed by lenders. While 28 percent of hospitals surveyed said they were seeing a moderate to significant decrease in days cash on hand, a year ago 72 percent said they were experiencing tightening cash on hand.A number of hospitals responded last year that they actually stopped projects already in progress, but no hospital indicated that it had halted construction, clinical or information technology projects in the first quarter of 2010.And those seven hospitals in the red are fewer than the 13 hospitals running at a deficit during the fourth quarter of 2009, and 14 in the last quarter of 2008.Since the first quarter of 2008, between four and seven hospitals have been operating in a debt situation each quarter.The future may remain clouded for a while for New Hampshire’s hospitals as patient utilization — “a lagging indicator” said Kathy Bizarro, the hospital association’s executive vice president — continues to climb while reimbursements fall.Some 56 percent of hospitals said they were experiencing increases in their uncompensated care during the first quarter, compared to 72 percent a year ago. However, the portion of respondents who said they saw significant increases remained about 28 percent.“Community need for care remains high, and in tough times, people in our communities turn to their local hospitals,” said Bruce King, chairman of the association’s board of trustees and chief executive of New London Hospital. “Hospitals face a difficult challenge trying to balance the growing needs of their communities with economic circumstances.”Cindy Kibbe can be reached