More and more, hospitals are stopping or postponing "shovel-ready projects" that would not only improve community health care, but also increase jobs and support the local economy, according to a new survey from the American Hospital Association. The survey showed that hospitals' ability to obtain the necessary funds to upgrade their facilities or invest in new clinical and information technologies is severely restricted due to the "capital crunch" and the recession.

Hospitals primarily rely on borrowed money, philanthropy and reserves to fund capital projects to improve their ability to meet communities' health care needs, but many now find it difficult to obtain funds from these sources. The vast majority of hospitals report that borrowing funds through tax-exempt bonds - the main source of borrowing for most hospitals - is difficult or impossible. In addition, loans from banks or other financial institutions are similarly difficult to obtain. Hospitals' reserves, or savings, also have taken a hit due to falling stock prices, net income is down and philanthropic donations have slowed, leaving hospitals with less of their own funds to rely on to make needed improvements.

Nearly half of hospitals surveyed have postponed projects that were to begin within the next six months and many have stopped projects that were already in progress. For example, in Baton Rouge, Louisiana, Woman's Hospital has delayed and may have to stop construction of a new facility that would help the hospital fulfill its state-appointed responsibilities to evacuate and care for infants during catastrophes, which they have done in the past during Hurricanes Katrina, Rita and Gustav.
"From cancer centers to expanded emergency departments to electronic health records systems, hospitals are postponing or delaying projects that could greatly benefit health care in communities across the country," said AHA President and CEO Rich Umbdenstock. "Stopping these projects also means new jobs are not created within the health care field or for construction workers, contractors, IT specialists and others. The ripple effects of the capital crunch on employment are cause for great concern."

Stopping or postponing facility upgrades and technology investments has significant ramifications for communities served by these hospitals and for the health care system as a whole. According to the survey, the planned hospital projects now put on hold would have responded to a variety of health care needs:

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