Fitch Ratings sees financial good news for providers as the Biden administration moves to strengthen the Affordable Care Act.
President Joe Biden's executive order opening a three-month enrollment period for health insurance under the Affordable Care Act "would generally improve the financial position of not-for-profit hospitals," Fitch Ratings says.
In an issues brief published this week, the bond rating agency notes that hospital margins have been squeezed by several factors during the public health emergency, including higher volumes of uninsured patients who've lost job-sponsored coverage, high COVID-related caseloads, increased costs for medical scarce personal protective equipment and other medical supplies, regulatory uncertainties, and reductions in money-making elective procedures and surgeries.
"Reducing the number of uninsured and shifting the payor mix towards Medicaid coverage and privately insured will help mitigate revenue pressures," Fitch says.
Fitch notes that Biden did not campaign on an aggressive expansion of healthcare, such as the public option or Medicare for All.
Instead, his administration is expected to reduce the numbers of uninsured Americans with a focus on raising the upper-income eligibility for health insurance premium subsidies, increasing premium tax credits for coverage obtained through ACA Marketplaces, and raising the Medicaid poverty-level threshold, which could encourage the 12 hold-out states that have not expanded Medicaid to relent and adopt the ACA.
"This latter change would be credit-positive for hospitals in states where Medicaid has not been expanded, although political headwinds in key states like Texas persist," Fitch says. "It remains to be seen whether certain Medicaid waivers such as work requirements or block grants granted by the Trump administration will be rescinded by the Biden administration."
Democratic control of Congress and the White House also means that hospitals can breathe a little easier knowing that the ACA is no longer under threat of elimination, Fitch says.
The U.S. Supreme Court is expected to rule at mid-year on California v. Texas. However, even if the high court agrees with the plaintiff states that the individual mandate is unconstitutional and inseverable from the rest of the ACA, Democratic majorities in the House and Senate could easily remedy the matter legislatively.
More than 20 million people would lose health insurance coverage if the ACA were eliminated.
"This would generally reduce hospital revenues and could exert downward rating pressure on hospitals, particularly in states that expanded Medicaid coverage under the ACA," Fitch says.
Hospital stakeholders will also wait to see if the Biden administration rescinds other Medicaid waivers approved by the Trump administration, including Medicaid block grants and work requirements.
A proposal by the Biden administration to lower the age eligibility for Medicare to 60 is expected to have mixed results for providers "if a significant number of people move to Medicare from commercial payor coverage," Fitch says.
It's also not clear how much support that proposal has in Congress.
Cost-shifting by hospitals to cover lousy Medicaid reimbursements will become more problematic as price transparency mandates take effect.
Lower state Medicaid per-patient reimbursements correlate with higher cost-shifting to commercial and managed care plans, a new study from Crowe LLP's Revenue Cycle Analytics shows.
Cost-shifting is not new, of course. It's been going on for decades.
However, foisting higher costs on commercial payers in low-reimbursement states means consumers are paying more for healthcare, and that could prove problematic as more charge data becomes available to the public under federal and state price transparency mandates, says Brian Sanderson, managing principal of healthcare services at Crowe.
"Effectively, if you live in a state with lower Medicaid reimbursement rates and get your insurance through your employer, you're likely being charged more than what the exact same service costs in other states," Sanderson says.
The accounting and consulting firm's new report, Price Transparency in Healthcare: It Won’t Help Hospitals, examined patient transactions 707 hospitals in 45 Medicaid expansion states and 445 hospitals in non-expansion states, as of 2019.
The analysis found that the Medicaid outpatient net payments hospitals get varied greatly among 45 states, with payment discrepancies ranging from $200 to $650 per patient.
Several factors affect payments, including acuity, locality adjustments and types of programs, Crowe reports, "but one thing is clear: state-run Medicaid programs are not uniform across the country, in process or payment."
Crowe found a similar correlation when the analysis compared average outpatient managed care and Medicaid reimbursement by state as a percent of Medicare outpatient rates for a similar set of services.
For states with lower Medicaid reimbursement rates, including Florida (40%), California (39%) and Wisconsin (39%), the comparative rates for managed care were high at 268%, 261% and 251%, respectively.
Conversely in states with higher Medicaid reimbursement rates such as Iowa (78%) and Minnesota (97%), the managed care rates were lower at 166% and 188%, respectively, the analysis found.
"Hospitals and health systems will need to focus on highlighting their best attributes, like quality of care, convenient locations and well-rounded services offerings," Sanderson says.
"We envision a future where many parameters of a patient's decision are graded, similar to how we shop for cars," he says. "For example, a luxury SUV costs more than a no-frills sedan model – but differences in reliability, safety features and prestige might lead some customers to choosing the more expensive option."
Editor's note: This story was updated on February 3, 2021.
Most telehealth visits at 534 federally qualified health center care venues across California were audio only.
Health clinics serving lower-income patients have seen a surge in audio telehealth use during the pandemic, which allowed clinics to maintain access at a time when other healthcare venues saw significant drops in patient volumes, a new RAND Corporation research letter has found.
However, most of the telehealth visits at 41 federally qualified health centers operating in 534 care venues across California that were examined in the study were audio only, which RAND said raises concerns about care quality and access equity for patients, and the financial stress for clinics if payers stop paying for audio services after the public health emergency expires.
"While there are important concerns about the quality of audio-only visits, eliminating coverage for telephone visits could disproportionately affect underserved populations and threaten the ability of clinics to meet patient needs," said study lead author Lori Uscher-Pines, senior policy researcher at nonprofit RAND.
The research letter was published Tuesday in JAMA Network.
The study found that overall visit volume at the California FQHCs held stable during the pandemic, with half of primary care medical visits from March to August done via telehealth.
More than 77% percent of behavioral health visits were conducted via telehealth over the same period. Before the pandemic, RAND found there was minimal telehealth use.
For primary care medical visits, 48.5% were by telephone, 3.4% were by video and 48.1% were in person. For behavioral health, 63.3% were by telephone, 13.9% were by video and 22.8% were in person, RAND found.
Before the pandemic, audio-only telehealth visits were rarely reimbursed by commercial payers and government programs. However, at the onset of the coronavirus pandemic in March 2020, the Centers for Medicare & Medicaid Services announced that it would temporarily reimburse FQHCs for video and audio-only telehealth services.
It's not clear if CMS or commercial payers will continue to pay for audio-only telehealth services when the PHE expires.
"Lower-income patients may face unique barriers to accessing video visits, while federally qualified health centers may lack resources to develop the necessary infrastructure to conduct video telehealth," Uscher-Pines said.
"These are important considerations for policymakers if telehealth continues to be widely embraced in the future."
The total number of primary care visits dropped by 6.5% during the study period, while there was no significant change in total behavioral health visits.
The use of telehealth declined slightly during the study period after spiking at the start of the pandemic. Audio-only telehealth visits peaked in April 2020, making up 65.4% of primary care medical visits and 71.6% of behavioral health visits, the study found.
Editor’s note: This story was updated on February 3, 2021.”
Fitch Ratings estimates that the federal medical assistance percentage enhancement added $34 billion in federal aid to state Medicaid programs in 2020, and that a similar level of funding is projected for 2021.
The extension through the end of 2021 of billions of dollars in federal enhanced emergency funding for Medicaid will be welcomed by cash-strapped states, Fitch Ratings says.
In an issues brief released on Monday, Fitch estimated that the federal medical assistance percentage (FMAP) enhancement for Medicaid added $34 billion in direct federal aid to states in 2020, and that a similar level of funding is projected for 2021.
"Providing timely and direct fiscal aid to states limits their need to immediately pass on budget pressures to entities reliant on state funding, including school districts, public higher education institutions and healthcare providers," Fitch says.
Federal law sets the FMAP floor of 50% for states with the highest per-capita income, with a ceiling of 83%. In April 2020, the Families First Coronavirus Response Act (FFCRA) added 6.2 percentage points to every state's FMAP percentage.
Overall state revenues remain below pre-pandemic levels, but Fitch notes that the FMAP and better-than-expected sales tax revenues have helped states eke by since a public health emergency was declared last spring.
Fitch notes that the additional FMAP funding only affects states' spending on previously eligible Medicaid beneficiaries, and does not apply to Medicaid expansion spending under the Affordable Care Act, which the federal government matches at 90% for all states.
Medicaid enrollment for legacy categories is between 3x and 4x larger than expansion enrollment.
The Department of Health and Human Services last month told the nation's governors that the Biden administration anticipated the public health emergency would remain in place through 2021 and that HHS would provide states with at least 60 days' notice of termination.
The Trump administration routinely waited until the last minute before extending the 90-day PHE, and Fitch said states responded to the uncertainty and assumed little or no FMAP funding in their 2021 budgets.
The National Association of State Budget Officers reported in September that many states had anticipated a slowdown in revenue growth and made the appropriate adjustments.
"Even before the COVID-19 outbreak, states were planning on slower spending and revenue growth than what they had seen in several recent years," NASBO said.
"Based on information included in governors’ budget proposals, the median general fund spending growth rate was 3.1%, while the median general fund revenue growth rate was 2.9%, both below historical averages."
The Centers for Medicare & Medicaid Services, and the Kaiser Family Foundation have estimated that the 6.2 percentage point increase in FMAP in 2020 added about $32 billion in enhanced funding for Medicaid.
The delay is part of a larger move by the Biden administration to freeze for 60 days many of the regulatory changes put forward in the last days of the Trump administration that have yet to take effect.
The Department of Health and Human Services has pushed back by two months the implementation date for the controversial Medicare Part D prescription drug Rebate Rule for pharmacy benefits managers.
The delay for the rebate rule, which was supposed to take effect on January 29, is part of a larger order by the Biden administration on January 21 to freeze for 60 days many of the regulatory changes put forward in the last days of the Trump administration that have yet to take effect.
"The effective date of new paragraphs (h)(6) through (9), (cc), and (dd) of that rule, which would have been January 29, 2021, is now March 22, 2021," HHS wrote in the Federal Registry.
"The temporary delay in the effective date of this final rule is necessary to give Department officials the opportunity for further review and consideration of the revisions to paragraphs (h)(5)(vi) and (viii), as well as the addition of new paragraphs (h)(5)(iii), (6) through (9), (cc), and (dd) of 42 CFR 1001.952."
The Rebate Rule eliminates the current system of rebates for prescription drugs under Medicare Part D. HHS under the Trump administration claimed that excluding rebates paid by drug makers to pharmacy benefit managers would resolve a "perverse incentive" and create a "safe harbor" that protects discounts at the point of sale.
PBMs chafed at the Rebate Rule, however, and warned that it would increase premiums for 47 Million Medicare Part D beneficiaries and taxpayers in 2022. Stakeholders had asked a federal judge to delay the implementation date, and they cheered the news of the delay.
"Not only is the rebate rule itself misguided, but the aggressive timeline is virtually impossible to meet," Scott said.
The Campaign for Sustainable Rx Pricing praised the Biden administration's "decision to delay this misguided pharma-backed proposal to protect America’s seniors and taxpayers."
CSRxP executive director Lauren Aronson said the Rebate Rule "would do nothing to lower drug prices while also increasing premiums on Medicare Part D beneficiaries, costing taxpayers more than $200 billion and handing drug companies a more than $100 billion bailout."
Enticements to customers included trips to The Masters, the U.S. Open, the Kentucky Derby, the World Series, the Indianapolis 500, and New York Fashion Week.
athenahealth Inc. will pay $18.2 million to settle whistleblower allegations that the Watertown, Massachusetts-based electronic health records vendor paid kickbacks and lavished "high profile, bucket list" gifts to physicians and other vendors who bought or touted their athenaClinicals EHR platform, the Department of Justice said.
In a complaint filed this week in U.S. District Court in Boston, federal prosecutors said that from January 2014 through September 2020, "athena entertained potential clients with all-expense-paid trips to sporting and recreational events, paid existing clients thousands of dollars for referrals of new healthcare practices, and paid competing vendors that were discontinuing their EHR products to recommend that their clients transition to athenaClinicals."
The enticements included trips to some of the nation's most prestigious sporting events, including The Masters, the U.S. Open, the Kentucky Derby, the World Series, and the Indianapolis 500, and New York Fashion Week.
"Through these kickback schemes, athena caused the Medicaid and Medicare programs to pay millions of dollars in false claims for incentive," DOJ said.
In a statement issued to HealthLeaders, athena said it did nothing wrong, and conducts business "ethically and with integrity—values that are integral to our company's culture."
"While we have full confidence in our robust compliance policies and programs, we agreed to this settlement—under which we admit no wrongdoing—to put this matter behind us and move forward with our critical work on behalf of patients and healthcare providers," the vendor said.
Prosecutors detailed a three-pronged marketing strategy athenahealth used to reel in clients.
"First, athena allegedly invited prospects and customers to all-expense-paid sporting, entertainment and recreational events. The most lavish of these events, such as "bucket list" trips to the Masters Tournament and the Kentucky Derby, included complimentary travel along with luxury accommodations, meals and alcohol," DOJ said.
Second, athena built a "Lead Generation" scheme that allegedly paid kickbacks to physicians who got colleagues to use athenaClinicals.
"Under this program, athena paid up to $3,000 per physician that signed up for athena services, regardless of how much time (if any) the client spent speaking or meeting with the lead," DOJ said.
Third, athena allegedly colluded with SOAPware, a competing vendor, to steer users of SOAPware's defunct outpatient EHR platform to athenaClinicals.
"Under the deal, Athena obtained client lists and was able to contact SOAPware's clients before other EHR vendors were aware that SOAPware intended to discontinue its offering," the affidavit read.
"Athena also worked with SOAPware to create a solution to migrate client data to athenaClinicals before SOAPware announced that it was terminating its service. SOAPware clients who selected EHR platforms other than athenaClinicals reported significant difficulty in migrating their data to those platforms."
Phillip M. Coyne, special agent in charge for the Office of Inspector General of the Department of Health and Human Services, said "fraudulent activity undermine the integrity of medical decisions, subverts the health marketplace, and waste taxpayer dollars,"
"If the benefits of electronic health records are to be fully realized, patients must be confident providers have selected the most effective system – not the one paying the largest kickbacks," he said.
A RAND study shows the gap is even wider for brand-name drugs, with U.S. prices averaging 3.44 times those of 32 other nations.
U.S. consumers pay 2.56 times more on average for prescription drugs than consumers in 32 other nations, a RAND Corporation report released Thursday shows.
"Brand-name drugs are the primary driver of the higher prescription drug prices in the United States," said lead authorAndrew Mulcahy, a senior health policy researcher at nonprofit, nonpartisan RAND.
"We found consistently high U.S. brand name prices regardless of our methodological decisions," he said.
Brand-name drugs accounted for 11% of U.S. drug sales volume and 82% of the spend.
Conversely, U.S. generic prices are 84% of the average paid in other nations, make up 84% of U.S drug sales by volume, but account for only 12% of the spend.
The lower generic costs did not offset the higher brand-name costs in the United States, RAND found.
"For the generic drugs that make up a large majority of the prescriptions written in the United States, our costs are lower," Mulcahy said. "It's just for the brand name drugs that we pay through the nose."
PhARMA offered a lengthy rebuttal to the points made in the RAND study, noting that "international comparisons often compare the high list or invoice price in the United States to artificially low prices set by governments in other countries."
The RAND analysis relies on 2018 data – the latest available – and compares U.S. prices with those of other countries in the OECD.
The researchers estimate that the 32 OECD nations they studied spend $795 billion on prescription drugs, with the U.S. accounting for 58% of sales, but only 24% of the volume.
The analysis used manufacturer prices because net prices after negotiated rebates and other discounts are applied are not systematically available.
Even after adjusting U.S. prices downward based on an approximation of these discounts, however, RAND found that U.S. prices are still substantially higher than those in other countries.
Drug spending in the U.S. grew 76% between 2000 and 2017, by some estimates accounts for 10% of all U.S. healthcare spending and is one of the fastest-growing cost-drivers in healthcare.
The study was commissioned by the Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation.
PhARMA Responds
The drug makers' association noted that, by focusing on invoice prices, RAND's analysis "failed to account for savings negotiated by insurers and pharmacy benefit managers, as well as mandatory discounts like those provided by manufacturers through Medicaid and 340B."
"In the United States, we rely on a competitive market to control costs and the new RAND study demonstrates that our system is largely doing just that," PhARMA said in an email to HealthLeaders.
“While the authors admit their report doesn’t reflect the lower net prices paid throughout the U.S. healthcare system, it does recognize that sometimes Americans do pay more, but when we do it is for innovative, lifesaving medicines, not generic medicines that have been on the market for a while."
"This helps ensure Americans have access to the latest medical advances. Here in the United States, nearly 90% of new medicines launched since 2011 are available, compared to just 44% on average in the other OECD countries in the study, and Americans get access to new medicines years earlier on average."
PhARMA said existing price disparities between the United States and other countries would be best remedied with trade agreements and enforcements.
"Policymakers should also pursue commonsense reforms to fix our system that will lower out-of-pocket costs for patients like providing an annual cap on patient out-of-pocket costs in Medicare Part D, lowering patient cost sharing and allowing patients to spread their costs throughout the year,” PhARMA said.
AHIP Reaction
America's Health Insurance Plans, however, leaped on the newly released study as evidence of "how out-of-control drug prices are."
"The problem is the price, which is set and controlled solely by drug makers," AHIP said in a media release.
"Health insurance providers are your advocate, working hard to negotiate lower prices for patients and consumers. But drug companies keep raising their prices year after year. Big Pharma has already increased prices for at least 582 brand-name drugs, in the midst of a global pandemic that is hurting hardworking American families."
Nearly one in four Californians (23%) know someone who has died of COVID-19.
Containing COVID-19 and making healthcare affordable and accessible for all should be the top priorities for lawmakers and stakeholders in California in 2021, a new poll finds.
"COVID-19 has definitively shaped the views of Californians over the last year and addressing the pandemic has become Californians' top policy priority by far," said Kristof Stremikis, director of Market Analysis and Insight at the California Healthcare Foundation, which commissioned The 2021 California Health Policy Survey.
"Still, ongoing issues like the high cost of healthcare, the number of healthcare providers, and access to mental healthcare remain top of mind for many," Stremikis said.
"Health equity is also a concern. Significant numbers of Californians say it is harder for Black and Latinx people to get the care they need compared to White people."
The poll of 1,541 adult Californians was conducted between November 19, 2020, and January 12, 2021 by NORC at the University of Chicago.
Among the findings:
63% of Californians say addressing the COVID-19 crisis is "extremely important" than any other priority in the three years CHCF has conducted this annual survey. 50% prioritize making healthcare more affordable.
23% of Californians say they know someone who has died of COVID-19, with larger numbers among Black (32%), Latinx (27%), and Asian Californians (26%), compared to 17% of White residents.
71% say they "definitely" or "probably" will be vaccinated once the COVID-19 vaccine becomes available to them. A total of 13% say they will "probably not" be vaccinated, and 16% say they will "definitely not" get the vaccine.
59% say ensuring state and county public health departments have the resources they need to control the spread of COVID-19 is "extremely important."
49% say making sure there are enough doctors, nurses, and other healthcare providers is "extremely important."
45% say making sure people with mental health problems can get the treatment they need is "extremely important."
52% report that they or a family member skipped or postponed healthcare in the last 12 months — mostly due to issues related to COVID-19.
51% say they took at least one action to delay or skip care because of cost in the last 12 months. Of those who cut back on care due to cost, 41% say the steps they took because of cost made their health condition worse.
51% say it is "harder" or "much harder" for Black people to get the healthcare they need when they are sick compared to White people. 49% say it is "harder" or "much harder" for Latinx people.
62% are "very" or "somewhat" worried about unexpected medical bills and out-of-pocket costs (60%).
54% are worried about affording treatment for COVID-19, 34% of Latinx, 33% Black), and 29% of Asian Californians saying they are "very worried" about affording treatment, compared to 17% of White Californians.
64% favor creating a national "public option" health plan.
60% favor lowering the age people are able to enroll in Medicare from 65 to 60.
43% favor a single-payer system. 25% strongly oppose such a policy.
64% of Californians favor increasing subsidies to make coverage more affordable for those purchasing through the ACA.
A GAO report paints a bleak picture of the state of healthcare access in rural America.
More than 100 rural hospitals in the United States closed between 2013 and 2020 and that has significantly increased the travel distance to access care for Americans living in those shuttered service areas, according to a Government Accountability Office report.
"Specifically, for residents living in these service areas, GAO's analysis shows that the median distance to access some of the more common healthcare services increased about 20 miles from 2012 to 2018," according to the report, Rural Hospital Closures: Affected Residents Had Reduced Access to Health Care Services, which was made public this month.
It's even worse for rural patients seeking specialized care.
"For example, among residents in the service areas of the 11 closed hospitals that offered treatment services for alcohol or drug abuse, the median distance was 5.5 miles in 2012, compared to 44.6 miles in 2018—an increase of 39.1 miles to access these services," GAO said.
There were more than 2,200 rural hospitals representing 48% of the nation's hospitals in 2017, providing care in 84% of the U.S. land area, and serving 18% of the U.S. population. Numerous studies have shown that rural patients tend to be older, sicker, poorer and more likely to rely on Medicaid and Medicare.
The closures also had a deep economic effect on the immediate areas they serve, because hospitals are often the largest employers in a region.
Federal data show that rural communities have lost 2,066 inpatient beds and 6,347 full-time employees because of rural hospital closures from 2013 through 2017.
Making matters worse for residents in closed service areas was the exodus of physicians when hospitals closed, further hindering access to care, GAO said.
"Specifically, counties with closures generally had fewer healthcare professionals per 100,000 residents in 2012 than did counties without closures," GAO said.
Between 2012 and 2017, "the availability of physicians declined more among counties with closures—dropping from a median of 71.2 to 59.7 per 100,000 residents—compared to counties without closures—which dropped from 87.5 to 86.3 per 100,000 residents," GAO said.
In the year before shuttering, hospitals that closed between 2014 and 2017 had a median of 30 inpatient beds and 96 full-time-employees. By comparison, open rural hospitals in 2017 had a median of 25 inpatient beds and 179 full-time-employees.
Stressors Grow
GAO said an analysis of data from the Department of Health and Human Services showed that many of the closed hospitals were in financial distress or operating in the red years before they shuttered.
"Specifically, for hospitals that closed from 2014 through 2017, the median margin declined from -3.3% in 2012 (the year prior to our closure study period) to -13.8% in the year prior to closure—a reduction of 10.5 percentage points," GAO said.
"Consistent with our findings, NC RHRP's research found that the margins for rural hospitals have declined from 2016 through 2018, putting these hospitals at higher risk of financial distress," GAO said.
"Moreover, the percentage of rural hospitals classified as high or mid-high risk of financial distress has increased over the past 5 years—from 24% in 2015 to 26.2% in 2019," GAO said, with a particularly large increase in financial distress for rural hospitals in the South, which also saw the highest numbers of hospital closures.
The GAO report was requested by U.S. Sen. Gary Peters, D-Mich., the new chairman of the Committee on Homeland Security and Governmental Affairs.
The coronavirus pandemic wreaked bottom line havoc on the nation's healthcare delivery system in 2020 and that trend is expected to continue well into 2021.
Kaufman Hall's latest National Hospital Flash Report finds that the elevated COVID-19 inpatient volumes, coupled with spooked consumers unwilling to visit care venues for non-urgent services, completed 2020's months-long trend of declining operating margins for physicians and hospitals.
"The remaining winter months will be critically challenging for our hospitals and health systems as COVID-19 hospitalizations climb and new, more contagious variants of the virus spread nationwide," said Jim Blake, a managing director at Kaufman Hall and publisher of the National Hospital Flash Report.
"COVID-19 will continue to create a volatile environment well into 2021," he said.
The report notes that, for hospitals, "escalating expenses coupled with declining volumes and outpatient revenues continued to stress limited resources."
"The median Operating Margin dropped 55.6% (4.9 percentage points) throughout 2020 without Coronavirus Aid, Relief, and Economic Security (CARES) Act funding and was down 16.6% (1.2% percentage points) with CARES," the report said.
"In December, Operating Margin declined 18% (2.4 percentage points) year-over-year but increased 21.2% (2.2 percentage points) from November without CARES," KH said.
KH's quarterly Physician Flash Report reported similarly that performance metrics remained below 2019 levels on most measures.
"The increasing size of employed physician groups and the level of investment needed to support them continue to strain health system operating margins," said Cynthia Arnold, senior vice president at Kaufman Hall.
"While inpatient care and procedures offset those subsidies somewhat, long-term success will require joint system-physician leadership representation and robust data and analytics to address physician productivity issues," Arnold said.
The median investment to subsidize inadequate physician revenues fell 9.5% in Q4 but was up 0.5% year-over-year in October at $194,632 per physician.
Physician work Relative Value Units per Full-Time Equivalent —was 4.9% below 2019 levels in October, because of fewer patient visits and lower hospital diagnostic and procedural volumes.
New patient visits also fell year-over-year owing to a bad economy, competition from telemedicine, and the ongoing dread of some patients to visit physician offices. The lower productivity drove Net Revenue per Physician FTE down 4.5% year-over-year compared to 2019, KH said.
The KH analyses also found that:
The median hospital Operating Margin Index closed a tumultuous 2020 at 0.3%, not including federal CARES Act funding, according to the January. With the CARES funding, it was 2.7%.
The median 2020 Operating Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Margin was 5.1% without CARES and 7.6% with CARES.
Patient Days rose 4.5% compared to December 2019, thanks to Covid. Discharges were down 4.3% year-over-year and down 7.3% year-to-date, signaling an increase in higher acuity patients.
The Average Length of Stay rose 11% year-over-year and 6.6% from January through December 2020.
Emergency Department Visits volumes fell 16.2% for January through December and 22.6% year-over-year.
Operating Room Minutes fell 10.5% over the calendar year as many patients delayed non-urgent procedures due to COVID-19 concerns.
Lower volumes pushed revenue declines, particularly for outpatient services. Gross Operating Revenue (not including CARES aid) dropped 3.1% in 2020, while Outpatient Revenue fell nearly 6%. Inpatient Revenue was essentially flat, rising just 0.3% for the year.
Total Expense per Adjusted Discharge and Labor Expense per Adjusted Discharge both increased 14.4% throughout 2020, and Non-Labor Expense per Adjusted Discharge was up 14.2%.
