Posts Tagged ‘Debt’

Non-Profit Hospital Fundraising Soars in 2011

Monday, October 29th, 2012

According to a report from the Association for Healthcare Philanthropy (AHP), that is an 8.2 percent increase over the previous year.  The recent numbers continue a trend that started in 2010 when non-profit hospitals saw an eight percent rise in donations compared with 2009 to more than $8 billion.  Individual donations totaled nearly 60 percent of that amount, according to the AHP.  That was a significant increase over 2009, when donations fell 11 percent or $944 million.

During 2011, the cost of fundraising rose to 31 cents per dollar collected, a two percent rise over the previous year.  Healthcare systems raised $3.24 for every dollar they spent.  University-connected hospitals were the most prolific, with $7.58 raised for each dollar spent.   Approximately 19 percent of donated funds supported community benefits and charity care; an additional 8.6 percent funded training and research.

Annual giving was the primary fundraising source, followed by capital campaigns and special events.  Approximately 70 percent of money raised was in the form of cash contributions, while the remainder was pledges primarily in the form of bequests and planned gifts.

Susan J. Doliner, chair of the AHP board of directors, notes that “It’s interesting to see that the funds raised continue to be predominantly in support of construction and renovations, equipment and program operations.  Stay tuned, as this finding shines a light on the future gap in resources healthcare organizations will face as we begin the implementation of new healthcare financing models.”  The uptick in donations is good news for hospitals and healthcare systems working to accommodate millions of new patients when the Patient Protection and Affordable Care Act (ACA) becomes fully effective in 2014.  At present, healthcare systems are relying on capital campaigns to finance new construction rather than bank loans or other debt.   Only 17 percent are using debt, a decline from the 20 percent reported in 2010.  Another 42 percent are financing new facilities with cash reserves.  The use of tax-free bonds is at its lowest level in six years, comprising just 21 percent of new construction financing.

Super Committee’s Failure Raises Questions About Healthcare Funding

Wednesday, December 7th, 2011

Now that the Super Committee has failed to identify $1.2 trillion in cuts from the federal budget, automatic cuts totaling billions for everything from Medicare to biomedical research, start in 2013.  Some healthcare sectors will fare better than others.  The primary health entitlement programs, Medicare and Medicaid, are protected under the law that created the Super Committee.  Automatic cuts will not impact Medicaid, the joint federal-state health program for the poor.  Medicare would be cut by two percent – all from payments to hospitals and other providers.

The bad news is that unless Congress reworks the legislation mandating the automatic cuts, a series of across-the-board reductions will begin in 2013.  The House and Senate appropriations committees must decide how to spread the cuts among various programs.  And some of the larger, better-financed lobbies may be able to influence what is cut and what is kept.

Even though the Medicare cuts are limited to hospitals and other medical providers and would not exceed two percent, they argue that is too much and that they sacrificed plenty in the Patient Protection and Affordable Care Act (ACA).  Rich Umbdenstock, president and CEO of the American Hospital Association, said sweeping cuts would hurt Medicare beneficiaries and their families and “also have an impact on the ability of hospitals to provide essential public services to the communities they serve given the impact that Medicare has on the entire healthcare system.”

Officially known as the Joint Select Committee on Deficit Reduction, the Super Committee was unable to meet its deadline to come up with $1.2 trillion of deficit reduction required by the law that created it, much less the $4 trillion that deficit hawks said was necessary to stabilize the finances of the U.S. government, whose debt has topped $15 trillion.  The failure ensures that the fiscal debate between Democrats who want to protect social programs and increase revenue by raising taxes on the wealthy; and Republicans who want smaller government and have pledged to reject tax increases will be a fundamental choice confronting voters in 2012.

“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” Representative Jeb Hensarling,(R-TX), and Senator Patty Murray, (D-WA) said.  The co-chairs thanked committee members, staffers and “the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task.”

Writing for Politico, David Nather speculates on whether the Super Committee’s failure has harmed efforts to reform Medicare and Medicaid.  It would be easy to conclude that the Super Committee’s failure means the big, expensive health care entitlement programs — Medicare and Medicaid — are untouchable.  It also would be wrong.  The timing was off, coming too close to a presidential election.  The co-chairs weren’t powerful enough.  The work came too soon after a summer debt deal that Democrats hated.  Republicans couldn’t give the kind of concessions on taxes that Democrats needed.  And the alternative to a Super Committee deal on healthcare entitlements — the two percent automatic cuts in healthcare payments and defense funding that will now take place in 2013 — wasn’t harsh enough to force a deal on Medicare and Medicaid. In fact, it might even have been the easier way out.  All of which means Medicare and Medicaid are not off the table forever.”

The Hill’s Sam Baker offers a different perspective. “The Super Committee’s demise is a mixed bag for the American Medical Association and other groups that wanted the 12-member panel to tackle Medicare’s payment formula, known as the sustainable growth rate (SGR).  The AMA — with bipartisan support in Congress — pushed hard for the supercommittee to include in its deficit-cutting package a long-term fix to the SGR.  The formula calls for automatic annual cuts in doctors’ payments, which add up as Congress consistently delays each cut from taking effect.  Aspirations of a long-term SGR patch should be put to rest, healthcare lobbyists said. But they questioned whether the supercommittee push was ever realistic, because an SGR fix would add to the deficit.”

“I never once believed that the Joint Select Committee would be the one to do that,” said Julius Hobson, a senior adviser at the Washington, D.C.-based law firm Polsinelli Shughart and a former AMA official.