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Hospital Capital Spending Is on the Rise

Affordable Care Act expected to increase capital spending over the next several years

More than 50% of the nation’s nonprofit hospitals are expecting to increase capital spending as a result of the Affordable Care Act and the increased revenue that health facilities are bringing in from broader coverage, according to a recent analysis. In contrast, the report by the consulting firm Fitch indicates that only 45% of nonprofit hospitals planned to increase capital spending in 2012.

As Forbes notes, the improving trend is a bit of a surprise considering that just recently some reports forecast deterioration for 2014 in capital spending at hospitals and health systems, which are often an economic engine in communities across the country.

But the economy is improving. and large for-profit hospital operators like Tenet Healthcare, HCA Holdings, and Community Health Systems (CYH) are already reporting more patients since subsidized coverage became available at the beginning of 2014 under the law. Prior to the arrival of these newly insured patients, hospital operators were seeing flat or falling admissions in the economic downturn.

The Fitch report indicates nonprofit hospitals are generally improving financially as well, with fewer uninsured patients. The U.S. Census Bureau said the number of uninsured Americans fell to 33 million last year from nearly 42 million in 2013.

Source: Forbes, September 27, 2015.

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