Illinois hospitals face struggles to stay on firm financial ground

May 2, 2012

Rockford-based Swedish American Health System has announced layoffs and job position eliminations to stay in the black,  citing potential reductions to reimbursement rates under the state's Medicaid program. 

Swedish American CEO Bill Gorski says that's not the only thing that prompted the company to issue more than $9 million in cuts, which include nearly 50 layoffs.  He says a rise in charity care and bad debt costs are other factors.  Gorski says that, as they prepare for a new fiscal year, Swedish American needs to be ready for spending reductions in Springfield.  Governor Pat Quinn is proposing $2.7 billion in Medicaid cuts.  The Illinois Hospital Association proposes cutting nearly half that amount.

Martin Lipsky, dean of the University of Illinois College of Medicine at Rockford, says declining reimbursements are a big problem for doctors.  But he says there are plenty of ways for providers to keep down costs.

"I think we have invested too much money into specialty care, and not enough into primary care, which is less costly," Lipsky said. He says the industry also needs to be more efficient in how it uses technology for testing patients.

This report from the Illinois Hospital Association says one in three hospitals in the state operate in the red.