Archive for hospitals


Hospital Prices Lead Rise in Health Care Costs, Study Finds

A new study has concluded that rising hospital prices, not increased utilization, is primarily responsible for rising health care costs.

Overall, according to a new analysis by the Health Care Cost Institute, health care costs continue to rise despite declining health care utilization.

Among the report’s findings:

  • Hospital prices are rising faster than physician prices.
  • ER prices rose more than twice as much as ER utilization in 2017.
  • Increases in spending for psychiatric services outpaced increases in utilization of those services.
  • Inpatient spending rose 10 percent between 2013 and 2017 even though inpatient utilization fell five percent during that period.
  • Over that same period, outpatient surgery prices rose 14 percent while utilization declined four percent.

The report also found that health insurance prices are rising faster than wage growth.

Learn more about trends in health care costs and utilization from the Health Care Cost Institute analysis “2017 Health Care Cost and Utilization Report.”

New Study Zeroes in on ER Use

A new study has concluded that more than four million emergency room visits a year are for chronic medical problems that, if treated more effectively at the primary care level, could have been avoided.

And that those more than four million visits cost $8.3 billion a year.

According to a new analysis performed by Premier, Inc., more than 24 million ER visits a year are by patients with six chronic medical conditions:  asthma, chronic obstructive pulmonary disease, diabetes, heart failure, hypertension, and behavioral health problems.  Thirty percent of those visits, the study concluded, could have been prevented with better care at the primary care and care management levels.

The study also suggests strategies for improving that primary care and care management.

Learn more about the Premier study in the Healthcare Dive article “EDs could save $8.3B annually with better primary care, study finds.”

Hospitals Sue Over Site-Neutral Outpatient Payment Policy

Nearly 40 hospitals have filed a joint lawsuit in opposition to the Centers for Medicare & Medicaid Services’ site-neutral payment policy for Medicare-covered outpatient services.

In the suit, the hospitals charge the federal government with overstepping its authority in implementing such a change through regulation in the face of past congressional action to limit the use of site-neutral payments.

Under its site-neutral payment policy, Medicare pays the same for some outpatient services regardless of where those services are provided.  Under Medicare’s previous policy, Medicare paid more for services provided in hospital-run outpatient facilities.

Hospitals argue that their outpatient facilities are more resource-intensive than ordinary doctors’ offices and that larger payments are justified.  CMS maintains that its site-neutral payment policies will save Medicare beneficiaries $150 million through reduced co-payments and increase competition among providers.

Learn more about the lawsuit, the issue, and the arguments for and against site-neutral Medicare outpatients payments in the Fierce Healthcare article “38 hospitals sue HHS over site-neutral payment policy.”…

Hospitals Flee Downside Risk in Medicare Bundled Programs

More than half of the hospitals that voluntary participate in Medicare bundled payment model programs leave those programs when faced with the possibility of financial penalties based on their performance.

So concludes a new report by the U.S. Government Accountability Office.

Some of these models feature both “upside” and “downside” risk.  Upside risk offers financial incentives to participants that keep their costs below targeted amounts; they share those savings with Medicare.  Downside risk occurs when hospitals are penalized when their costs exceed agreed-upon targets.  Some of the model programs begin with only upside risk and later move into both upside and downside risks, but when the downside risk begins, the GAO found, more than half choose to leave the voluntary programs rather than incur downside risk.

Some observers believe this behavior speaks to the need to require participation in the models rather than make participation voluntary.

Learn more about the GAO’s look at the behavior of hospitals that participate in Medicare bundled payment programs in its report “Medicare: Voluntary and Mandatory Episode-Based Payment Models and Their Participants.”


No Medicaid Expansion=Greater Peril for Rural Hospitals

Rural hospitals located in states that did not expand their Medicaid programs, as authorized by the Affordable Care Act, are at much greater risk of closing than hospitals in states that did expand their Medicaid programs.

According to a Stateline report, most of the 100 rural hospitals that have closed since 2010 and most of the more than 600 rural hospitals that are considered to be in danger of closing now are located in states like Texas, Mississippi, and 12 others that have not expanded their Medicaid programs.

Small rural hospitals that have not closed serve large proportions of uninsured patients, some of whom would have qualified for Medicaid had their state expanded its Medicaid program, providing at least some revenue in return for the services they have provided.  Some of these hospitals, already located in areas that tend to have more low-income residents, more people without health insurance, and more people with health problems, respond to this financial challenge by closing obstetrics units and other expensive services, saving money but reducing access to care in their communities.

Learn more about the financial challenges rural hospitals face and how those challenges now jeopardize their very existence in the Stateline report …