Staffing cuts at Pinnacle Hospital this month were one symptom, but not the only one, of the ailing economy's effect on the health care industry.

The physician owned hospital in Merrillville said the economic downturn led to a decline in demand for its elective procedures, forcing the layoff of up to 21 employees.

But new construction and the purchase of technology and other equipment also could suffer as hospitals, like other businesses, wait out turmoil on Wall Street and a worldwide credit crunch.

Market investments had been a sure source of cash for building facilities like the $38 million Franciscan Point, which opened in July in Crown Point, and acquiring new technologies such as the system's 64-slice imaging equipment, said Gene Diamond, regional chief executive officer of the Sisters of St. Francis hospital system.

But the cash source began drying up as investments weakened, Diamond said.

"We're having to postpone or delay plans to aggressively build new buildings and acquire new technologies," Diamond said, adding that no local projects are affected.

The November results of a survey by the American Hospital Association showed other hospitals are feeling the same pinch.

More than half, 56 percent, of hospitals were reconsidering or postponing renovations or expansions, and about 40 percent were delaying improvements to information technology or other equipment, according to the survey of 736 hospitals.

Using information from 557 hospitals that provided quarterly reports, the hospital association found investment results amounted to a combined loss of $832 million, compared with a $396 million gain a year earlier.

The survey also found 67 percent of hospitals saw some drop in elective procedures, with 6 percent reporting a significant drop.

And while 63 percent of hospitals in the nationwide survey saw overall admissions decline, that hasn't been the case for local hospitals.

Admissions to the Sisters of St. Francis system rose by 2.5 percent through October, compared to a year earlier, Diamond said.

Patient volume also has grown for the Community Healthcare System, with hospitals in Munster, Hobart and East Chicago, said John Gorski, senior vice president of hospital operations.

The hospital system's cautious approach means capital projects, including the $42 million renovation set to debut early next year at Community Hospital in Munster, are budgeted carefully, he said.

"We pay attention to what cash is available," Gorski said. "That's not to say we're immune. We may feel the effect down the road, but we use caution in every step we take."

The economy has affected all health care providers, said Jonathan Nalli, chief executive officer of the Porter hospital system, where plans are on track for a $210 million replacement to the existing Porter hospital in Valparaiso.

"It's something we're watching closely," Nalli said.

The Associated Press contributed to this story.