Impact of Recession on Different Sectors of Hospitals

Hospitals directly affect the economy through the jobs they provide and the incomes they pay to employees. Less obvious but no less important are the indirect or so-called multiplier effects of a business' operations. One type of indirect impact that hospitals have on the economy involves the jobs and productive activities required to produce goods and services that hospitals routinely purchase to carry out their operations

I. Stability of revenue :

Government hospitals whose primary source of revenue is from federal and state governments have a stable revenue irrespective of the economic downturns, followed by private not for profit organizations which depend on charity and donations

II. Dependence on public funds

A public hospital or government hospital is a hospital which is owned by a government and receives government funding. This type of hospital provides medical care free of charge, the cost of which is covered by the funding the hospital receives.

III. Ability to generate philanthropic support:

Private not for profit organizations are primarily depend on public funding and charities followed by government hospitals which depend on funds from federal and state government. So recession would hobble these private not for profit organizations where as the three other hospitals private for profit hospitals , Specialty hospitals and acute care hospitals which are individually owned they are less likely to be affected by turbulences in public funding .

IV. Changes in patient census with higher unemployment:

V. Ability to control costs

Specialty hospitals are owned by physicians they control some extent, the flow of patients who are admitted, they found to pick the least complex and most profitable cases. The relationship between complexity and profitability is a health care financing issue.

VI. Public expectations for quality care and profitability :

The lack of such correspondence between payment and anticipated costliness raises the prospect of adverse incentives: To the extent that certain hospitals can specialize in easier and less costly and therefore more profitable cases, they can benefit from a type of specialization that is entirely different from the focus on service efficiency and effectiveness.