Pierce said he could not identify the hospitals by name, since all
financial information is provided to the council on a confidential basis, but he said he was speaking of hospitals that are the major employers in their neighborhoods as well as the major suppliers of all medical care. If these hospitals close, he said, it would strike both an economic as well as medical blow to the areas they serve.
According to the council report, which covers the 1988 financial year, 26 of the 61 hospitals included in the report lost money on every service, that is, they not only lost money on patient care but also on such subsidiary sources of income as TV rentals and parking fees. Of these, 18 are Philadelphia hospitals and eight are suburban hospitals. In 1987, only eight Philadelphia hospitals and four suburban hospitals reported such losses.
An even greater number, 20 hospitals in the city and 12 in the suburbs, reported losses on patient care alone. And that is almost double the number of hospitals that reported patient care losses in 1987.
For the first time since the Hospital Council began gathering data, said Pierce, the total income for all 61 hospitals as a group shows a loss.
The situation is even worse than those figures indicate, he said, because three Philadelphia hospitals well-known to be in financial difficulty - St. Joseph's, Kensington, and John F. Kennedy - did not supply data for the Council's report.
Of Philadelphia's 35 hospitals, 20 are losing money, including the three that did not participate in the study.
Pierce said the blame for the losses can be laid squarely on "government irresponsibility." First, because the state Medicaid fund pays only 80 cents for each dollar of actual cost and, second, because the federal Medicare fund pays only 98 cents for each dollar of cost. And these two programs together cover almost half of all hospital patients. (About 34 percent are on Medicare, 15 percent on Medicaid.)
The hospitals also suffer, he said, because there is no government program covering those people who earn too much to qualify for Medicaid but are not old enough to qualify for Medicare. These are the working poor whose employers do not provide medical insurance. Most of the patients whose bills go unpaid for this reason are children, he said. He estimated that more than one million children in this area have no medical coverage.
In the short term, said Pierce, he expects that the hospitals will meet their financial problems through layoffs, increasing charges that are paid by private insurers, by decreasing services, by postponing the purchase of new equipment and by cutting back on medical supplies.
The hospitals' report came out just days prior to a possible strike Friday by Philadelphia District 1199C of the National Union of Hospital and Health Care Employees, which represents 8,000 workers at 35 area health care institutions.