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Study finds margins improve for Sonoma County health care providers

Gary Quackenbush, Special to the Business Journal
Friday, November 12, 2010, 4:04 pm
Categories: Health Care and Senior Living, Top News Stories | No Comments

SANTA ROSA – Operating revenues for Sonoma County health care organizations increased 2.2 percent in 2009 and total operating expenses fell 2.6 percent, marking the first decline in more than a decade and the highest level of net income since 2004, according to the  2010 Sonoma County Health Care Industry Insider Report.

The report is produced each year by the Sonoma County Economic Development Board in partnership with the Sonoma County Workforce Investment Board and in cooperation with research partner, Moody’s Economy.com.

The second major observation in the study is that health care reform is projected to reduce the number of uninsured from 12 percent to just 3 percent of the population, representing a drop from 60,000 to 15,000 residents.  The Sonoma County Department of Health Services estimates that health care reform will expand coverage to 45,000 additional residents of the county.

However, the report noted, the extension of health care coverage to nearly 30 million people nationwide does not translate into higher revenues for health care providers.

The high cost of developing new drugs and medical devices is seen as keeping the cost of medical services from falling substantially. This trend threatens to offset some of the cost savings assumed in the federal health care reform legislation because of higher taxes and also due to the prohibition of denial of coverage to individuals with pre-existing conditions.

Total patient days also declined by 8 percent in 2009 in Sonoma County, the fourth consecutive yearly decline, and outpatient visits declined by only 1 percent while the average usage of staffed beds dropped by 5 percent.

Capital spending by Sonoma County health care providers slid by 17 percent in 2009 following a decline of 27 percent in 2008.

The report noted that the slow pace of improvement in the Sonoma County job market will keep many households without private health insurance benefits. Total employment fell during the recession by 24,000 jobs, or 12 percent. Job losses in the county were larger than job losses in the U.S. and California.


Link to article: http://www.northbaybusinessjournal.com/26964/study-finds-margins-improve-for-sonoma-county-health-care-providers/

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