Health insurance is on the rise all over the country making it harder for people to afford it. People with no health insurance are less likely to request medical services from the hospital for fear of paying huge bills without it. With the supply of people decreasing, the hospital was finding it harder to break even. .
Its not jus HMO's trying to turn a higher profit either. The biggest portion of the healthcare to increase in cost is doctor's malpractice insurance. The lack of tort reform in this country allows an onslaught of frivolous lawsuits to flood the system. Plaintiffs don't even have to win the law suit to cost insurance companies hundreds of thousands in dollars. These costs are seldom absorbed by the insurance companies themselves, but often passed down in higher premiums. Higher premiums make it less advantageous for doctors to practice in certain medical fields. Some surgical fields have seen a huge decline in available doctors; fewer doctors mean less supply, high costs.
Other reasons for increasing health care insurance premiums are related to what a HMO is required to cover. The more procedures and medications an HMO is required by regulatory bodies, the higher cost the premium they will have to charge the customers. Some states, such as California, are requiring HMO's cover gender altering surgery, a procedure that is seen by some as not critical. .
In any other market, when demand goes down supply is decreased also to adjust. But in the medical community, you can't just restart refusing customers, laws won't allow it. Hospitals must provide the same level of care no matter what economic trends are doing. Hospitals can't go bankrupt and close the doors.
While cuts are never popular, they must be considered. A detailed list of what the hospital's responsibilities are any anything that is left that is currently offered is subject to cuts. The fine balance of trying to become more efficient verses impacting quality.