PRINCETON - New Jersey's hospitals, their employees and their patients all are feeling the devastating impact of the nation's recession, according to a statewide survey of hospitals conducted by the New Jersey Hospital Association.

Hospitals report sharp hits to their bottom lines, a drain on cash reserves and an increase in layoffs. They've also noted a jump in charity care patients, an increase in Emergency Room visits and a decline in patients scheduling elective procedures.

"This recession has dealt a staggering blow to New Jersey's hospitals," said NJHA President and CEO Betsy Ryan. "It has weakened their finances, drained their cash reserves and forced them to make extremely difficult decisions about job and service cuts. And it's affecting patients as well, who clearly are struggling with tough choices about their healthcare."
The findings are based on a survey of the state's acute care hospitals, conducted over six weeks spanning January and February. The results represent 50 percent of the state's 74 acute care hospitals.

Key trends identified by hospitals include:

* A loss of jobs. Forty-five percent of hospitals reported layoffs in 2008, with another 21 percent anticipating layoffs this year. In addition, 48 percent of hospitals reported eliminating vacant positions in 2008, while 13 percent have instituted a hiring freeze in 2009.
* Services in jeopardy. Seventeen percent of the responding hospitals reported eliminating services such as clinics and inpatient psychiatric care.
* A shake-up for patients. Hospitals report changes in patient volume. Six out of 10 hospitals reported a decline in elective procedures, 80 percent reported an increase in charity care patients and 76 percent logged an increase in ER visits.
* A dramatic decline in financial performance. The survey shows a shift in participating hospitals' total margins, from 3.5 percent in 2007 to negative 4.5 percent in 2008. This shift, applied across all of New Jersey's hospitals, represents a $1.5 billion loss off hospitals' bottom lines.
* A drain on cash reserves. Hospitals experienced a 27 percent drop in cash reserves, with participating hospitals reporting a decline in days cash on hand from 155 days to 113 days. Extended across the entire industry, this decline represents $1.7 billion vanishing from hospitals' balance sheets and their net worth.
* A squeeze on capital. More than half of the responding hospitals noted decreased access to capital or more costly capital that forced delays in improvement projects, including facility expansions, equipment purchases and development of health information technology.

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