Hospitals' Financial Woes

Are cuts in Medicare reimbursements to blame?


America's hospitals are facing a financial crisis. Deeper-than-expected cuts to Medicare reimbursements combined with financial pressures from managed care have led to a wave of mergers and consolidations. Hospital administrators have scaled back expensive services like home health visits and say they are pondering more cuts. The industry is hoping Congress will restore some of the Medicare spending that helped them treat elderly patients. But critics contend that the hospitals brought many of the problems on themselves by expanding too rapidly and buying physician practices and health-care businesses. Among those nervously watching the future are academic medical centers, which provide the bulk of the nation's charity care, and small rural hospitals, which are more sensitive to financial turbulence.

Many hospital administrators blame their financial problems on ...

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