US community hospitals, the recession and health care reform

What is it about?

Nearly one quarter of U.S. hospitals face operating challenges as health care reform begins to take effect. We studied how private for-profit and nonprofit hospitals fared through the Great Recession and examined how the recession might affect their ability to respond to the changing health care environment. While financially vulnerable hospitals recovered after the recession, their recovery was fueled by non-patient revenues while revenues from their main line of business continued to decline.

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Why is it important?

Payment reform and industry restructuring brought on by the passage of the Affordable Care Act will place significant pressures on hospitals of all types, but especially for financially weak and safety net hospitals. Policymakers need to realize that "one size fits all" approaches will not work for the hospital industry. It is important to design payment policies so that they do not expose weak hospitals to substantial financial risk that ultimately may compromise patient quality of care.