No End In Sight to Rising Healthcare Costs
Last week, Moody’s released a report on hospital admissions. In what they describe as “an historical anomaly that isn’t likely to be reversed any time soon,” it seems that the rate of growth for patient admissions to not-for-profit hospitals is actually declining. They chalk this up to a bad economy. But that’s just a blanket term; it’s not really the economy, but the people who are affected by the economy—and these days they can’t afford to pay out of their pockets.
"Hospitals are largely reimbursed on a per-case basis by governmental and private payers, creating a direct link between all volume indicators and hospital financial performance," said Moody's Senior Vice President Lisa Goldstein, author of the report. That’s a fair and true statement, but it leaves something out. Unless the consumer goes to the hospital, then the payers don’t actually even get involved.
I don’t think that declining admissions will actually surprise any hospital CFO, but the findings are worth knowing. Here are a few highlights:
- Since 1991, the rating agency found slower growth from one year to the next as the median growth rate declined to -0.02% in 2009 from 1.03% in 2008.
- They predict the poor admissions rate trend will likely continue into 2011.
- They also predict that admissions may become less important under a bundled payment system.
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