2012 Forecast for Calif. Hospitals Predicts Fiscal Problems, Closures

In 2012, California hospitals will encounter significant financial obstacles and some will be at risk for closure, according to a forecast by the California Hospital Association, Payers & Providers reports.

Forecast Details

According to the forecast, California hospitals face pressure from a stalled economy, increasing dependence on government health care programs and implementation of the federal health reform law.

CHA also said hospitals could also be at risk of losing outpatient business to retail clinics and physician-operated ambulatory care centers.

In addition, the report noted that labor unions representing health care workers -- including the California Nurses Association and the Service Employees International Union -- likely will become more aggressive in their opposition to proposed pay cuts from hospitals.

Implications

CHA President Duane Dauner said the challenges expected this year could cause some California hospitals to close. He said rural hospitals "are really vulnerable, as are some of the urban hospitals."

Dauner noted that the economic climate will prevent a large number of hospitals from accessing capital, which could contribute to the closures (Payers & Providers, 2/9).