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FOURTH SURVEY ON U.S. HOSPITALS AND THE FUTURE OF HEALTHCARE

 FOURTH SURVEY ON U.S. HOSPITALS AND THE FUTURE OF HEALTHCARE
 BOSTON, June 22 /PRNewswire/ -- While chief executives of nearly 1,400 acute-care hospitals across the country are becoming more optimistic about the financial survival of their own hospitals, they're growing increasingly pessimistic about the industry in general. And, more than one in ten report that they are having to turn away indigent patients as the rationing of healthcare becomes more prevalent in a period of rising costs and an aging population.
 Additionally, half of all chief medical officers at these hospitals say they would leave the healthcare field for equal financial opportunities elsewhere, and 43 percent would not encourage others to seek careers in medicine. They're expressing growing frustration with the high cost of malpractice insurance, a loss of status for the medical profession, and an overload of government intrusion and paperwork. Four out of ten report that financial difficulties are of personal concern, and many are joining physician groups, retiring early, giving up medical practices, becoming HMO or hospital employees...or changing careers.
 These are among the highlights of the fourth bi-annual U.S. Hospitals and the Future of Healthcare Survey conducted by Deloitte & Touche, one of the leading professional services firms in the United States. The survey covered a broad range of issues, from financial survival to national health insurance, and was mailed to 5,400 acute care hospitals ranging in size from fewer than 100 beds to more than 500.
 "The response rate was 25 percent, which is a good indication that both the doctors and administrators who run the nation's hospitals are extremely concerned about the future of the nation's healthcare delivery system," said Raymond J. Cisneros, National Healthcare Partner for the Big Six accounting and management consulting firm. "There is a lot of change occurring in the industry and a greater degree of expectation that closing hospitals and limiting services will result. The survey clearly shows that there is little question national health reform will be enacted; it's only a question of when.
 According to Cisneros, the survey also makes it clear that in the future, more care will likely be provided outside the hospital and there will be fewer duplicative facilities and services because of consolidation. "Hospitals will be larger and fewer in number and hospital/physician services will be better integrated as a result of closer partnerships between the two," he said. "There will likely be regional systems with local facilities providing limited or urgent care."
 Both the CEOs and chief medical officers who responded believe national healthcare reform will occur, but it is probably two to three years away, and that some combination of mandated employer health insurance coverage and price controls is likely.
 The survey also showed that:
 -- The rationing of healthcare is considered likely by an overwhelming 90 percent of the CEOs. Most of them attribute this to the escalating cost of technology and a growing elderly population. Adding to the dilemma, they say, is an extraordinary degree of care being provided even when it is known to be futile and the increasing use of defensive medicine, which causes overuse of expensive technology and services.
 -- Patients are being turned away or transferred in 13 percent of the responding hospitals because of an increasing shortfall in reimbursement from government and other payers. This is especially true in large, inner city hospitals and investor-owned institutions as well as in some Southern and Pacific states. According to 14 percent of the hospital CEOs, admissions to hospital emergency services is likely to be restricted if the volume of uncompensated care continues to grow.
 -- To control rising costs, hospital CEOs and medical staff presidents say they would expand illness-prevention services, eliminate duplicative equipment and services and pool regional resources.
 -- Managed care continues to grow and most hospital executives consider it to be as good, if not better, than other forms of delivery.
 Optimism Close to Home; Pessimism for the Industry in General
 Although about a fourth of the CEOs consider their hospitals to be in financial jeopardy, a majority expect future financial performance to be fair or better.
 At the same time, however, while predictions of hospital failures close to home have abated, pessimism about failures nationwide has increased since the 1990 survey. Most respondents predict a 5 to 9 percent failure rate in the next five years. However, the percentage of those who believe the failure rate will be 10 percent or more has risen from 18 percent in 1990 to 32 percent this year.
 If their hospitals faced financial failure, CEOs said closing down would be a last resort. Before that were to occur, they said they would consider a number of possible options: mergers with other hospitals, joining a health care system or expanding their own services to produce more revenue. The most optimistic forecasts came from CEOs in the South Atlantic region (Delaware; Washington, D.C.; Florida; Georgia; Maryland; North Carolina, South Carolina; Virginia; West Virginia), and the most pessimistic in the Mid-Atlantic region (New Jersey; New York; Pennsylvania).
 Optimism on the financial front appears to overlap into the personal lives of the CEOs who responded as well. While 51 percent of the CEO respondents in the 1990 survey said they would leave the field for equal financial opportunity in another industry, in 1992, the number who said they would leave for greener pastures declined to 42 percent.
 Asked how they would design the healthcare system of the future, "both CEOs and presidents of medical staffs indicated overwhelming support for an increased focus on funding preventive care," Cisneros said. "They believe that the most effective and efficient healthcare will be delivered through a highly integrated organization that combines patient short-term and long-term care, physician services, ancillary services, mental health and ambulance and transport services."
 -0- 6/22/92
 /CONTACT: Al Leach, 203-761-3160, or Mark Berman, 212-492-3661, both of Deloitte & Touche/ CO: Deloitte & Touche ST: New York IN: HEA SU:


JP-LR -- NY003 -- 2227 06/22/92 08:15 EDT
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Date:Jun 22, 1992
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