Catholic hospitals, like all other health care providers in the United States, have experienced extreme cost pressures due to the introduction of managed care, the increasing focus on outpatient care, and the reduction in the Medicare and Medicaid expenditures. The most common response to these problems has been the formation of health networks that provide a continuum of care and include outpatient clinics, ambulatory surgery centers, hospitals, physician groups, long-term care facilities, and managed care organizations.
Catholic hospitals have followed this trend, partnering with other Catholic hospitals, in addition to non-profit and for-profit providers, and diversifying into other forms of care outside the inpatient setting. But the ability of Catholic providers to offer a full continuum of care is limited by their adherence to the Ethical and Religious Directives for Catholic Health Care Services. These directives prohibit the provision of abortions, sterilizations, contraceptive counseling, and other family planning services at Catholic health facilities. Thus, Catholic hospitals have only three choices if they are to meet consumer demand for a comprehensive range of services: ignore the directives, contract with other providers to perform those services banned by the directives, or exit health care.