Article Abstract:
Four hospitals defaulted on their bonds during the first half of 1992, and many more may default as hospitals strive to adapt to a variety of adverse events. Hospitals were shaken by three catastrophic events in 1987 and 1988: prospective payment was fully implemented; physicians suddenly began demanding technologically advanced equipment; and insurance companies began demanding tougher contracting terms for managed care plans and indemnity insurance. As many as 500 hospitals are just beginning to show the effects of these events, and as many as 60 to 70 hospitals could close each year until the industry recovers.
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Article Abstract:
Mount Sinai Hospital Medical Center of Chicago has received the 1992 Foster G. McGaw Prize from the American Hospital Assn and the Baxter Foundation for its community-based efforts. Mount Sinai has provided extensive medical care for its neighborhood, improved community housing, provided jobs, and supported local organizations. However, the hospital is in a capital crises, earning a profit only once in the last four years. The physical plant has suffered, while funds have been raised for oncology and maternal and child care services.
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Article Abstract:
Hospitals, physicians and payers will continue to consolidate through the '90s through alliances, mergers, and acquisitions. Forty-eight percent of community hospitals belong to a health organization, and 23% belonged to the 50 largest systems in 1990. Factors causing consolidation include health-care costs, use of economies of scale, excess capacity reduction, and the need to stay in business. Employers have increasing influence over health care providers, taking control in order to manage costs.
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