What did we have to celebrate this last weekend I want to ask? When it comes to healthcare, not much. With 43% of the hospitals already in the red 
this is going to hurt in California, no doubt. Nursing homes will also feel the brunt. We have been through times like this before, just last year as a matter of fact but not at a time like this when financials for healthcare facilities are nearing rock bottom or have already been there.
The state offices will now be closed 3 days a month here in California too. I had a monthly report on hospitals here on the blog that tracked layoffs and bankruptcies and you can see the entire listing at the link below.
Desperate Hospitals – May 2009
Two industries need to come in to the fold though, pharma and health insurance. We are at a cross roads where even with the best philanthropy out there, the money is not enough to cover driving R and D costs, do we simply let all of the expertise move offshore so we can afford it? That is what is currently happening and will continue. There are pressures in the pharma areas from companies like Teva who are working to lower drug costs, even by taking big pharma to court. As a note, Teva is a company founded in Israel. Sure they want sales too, but perhaps not at the same levels as we have been paying for expensive name brand drugs.
Merck and Teva Go to Court over Singulair Going Generic
We are pricing ourselves right out of the affordability market so what value do we have when we can’t pay for the drugs and insurer continue to 
stipulate where coverage lies? The days of the big profits are going, small profits are still alive, but paradigms need to change. Hospitals are big consumers in both industries and are they too getting priced out of the market of affordability. I am afraid we are in for some real tough times not only in California, but all over. BD
The nine leading hospital company stocks are looking pretty bearish on their daily charts.
Reports and rumors in Washington late last week that the three large hospital associations are about to agree to give Congress and the Obama administration $150 billion in cost concessions over the next 10 years obviously have not been good for the hospital companies.
In addition, Sen. Max Baucus (D-MT) is looking for cuts in Medicare payments to hospitals and physicians.
And how many hospitals can run on California’s IOUs? Not only California, but most states are having budget problems because of Medicaid.
Hospital Stocks Down on Rumored Medicare Cuts -- Seeking Alpha
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