WASHINGTON – According to a new survey from the American Hospital Association, the ability of U.S. hospitals to obtain funds to upgrade their facilities or invest in new clinical and information technologies is severely restricted due to the "capital crunch" and the recession.

In a conference call with reporters, AHA president and CEO Richard Umbdenstock said hospitals primarily rely on borrowed money, philanthropy and reserves to fund capital projects to improve their ability to meet communities' healthcare needs, but many now find it difficult to obtain funds from these sources.

The vast majority of hospitals surveyed report that borrowing funds through tax-exempt bonds  -  the main source of borrowing for most hospitals  -  is difficult or impossible. Loans from banks or other financial institutions are similarly difficult to obtain. Umbdenstock said hospitals' reserves have also taken a hit due to falling stock prices, net income is down and philanthropic donations have slowed, leaving hospitals with less of their own funds to rely on to make needed improvements.

Nearly half of hospitals surveyed by the AHA have postponed projects that were to begin within the next six months and many have stopped projects that were already in progress. For example, Umbdenstock said Woman's Hospital in Baton Rouge, La., has delayed and may have to stop construction of a new facility that would help the hospital fulfill its state-appointed responsibilities to evacuate and care for infants during catastrophes, which they have done in the past during Hurricanes Katrina, Rita and Gustav.

"From cancer centers to expanded emergency departments to electronic health records systems, hospitals are postponing or delaying projects that could greatly benefit healthcare in communities across the country," said Umbdenstock. "Stopping these projects also means new jobs are not created within the healthcare field or for construction workers, contractors, IT specialists and others."