Faced with mounting debt and looming costs from the new federal health-care law, many local governments are leaving the hospital business, shedding public facilities that can be the caregiver of last resort.
Officials in Lauderdale County, Ala., this spring opted to transfer their 91-year-old Eliza Coffee Memorial Hospital and other properties to a for-profit company after struggling to satisfy an angry bond insurer.
"We were next to knocking on bankruptcy's door,'' said Rhea Fulmer, a Lauderdale County commissioner who approved the deal with RegionalCare Hospital Partners, of Brentwood, Tenn, but with trepidation. She said the county had no guarantee the company would improve care in the decades to come. "Time will tell.''
Clinton County, Ohio, in May sold its hospital to the same company. Officials in Kenai Peninsula Borough, Alaska, are weighing a joint venture with a for-profit company, similar to one the same company made with Bannock County, Idaho. And Prince George's County, Md., is seeking a buyer for its medical complex.
More than a fifth of the nation's 5,000 hospitals are owned by governments and many are drowning in debt caused by rising health-care costs, a spike in uninsured patients, cuts in Medicare and Medicaid and payments on construction bonds sold in fatter times. Because most public hospitals tend to be solo operations, they don't enjoy the economies of scale, or more generous insurance contracts, which bolster revenue at many larger nonprofit and for-profit systems.
Local officials also predict an expensive future as new requirements—for technology, quality accounting and care coordination—start under the overhaul, which became law in March.
Moody's Investors Service said in April that many standalone hospitals won't have the resources to invest in information technology or manage bundled payments well. Many nonprofits have bad credit ratings and in a tight credit market cannot borrow money, either. Meantime, the federal government is expected to cut aid to hospitals.
Health-care consultants and financial analysts say the pace of all hospital sales is picking up at a rate not seen since the 1990s, the dawn of managed care. James Burgdorfer, a partner with investment banker Juniper Advisory LLC in Chicago, said most public systems would end in the next two decades because the industry has become too complex for local politicians. "By the nature of their small size, their independence and their political entanglements, they are poorly equipped to survive,'' Mr. Burgdorfer said.
Great - every facility in health care will be for-profit.
I'm sure that will work out well.
And of course Obamacare forces people who don't have insurance to purchase it from for-profit companies or get hit with a 2.5% income tax bill.
That's going to bring in lots of new customers for the insurance industry.
It's like President Obama is a Manchurian Candidate - for corporations.
Helping to completely privatize the health industry, pushing for the privatization of the public school system, forcing UAW members to take 50% pay cuts, helping the bank industry get another 6-9 months of payments out of underwater homeowners before foreclosure...
This guy gives liberalism a bad name.
There is nothing "liberal" about him.
He is a corporate whore through and through.