Rating Agency: Weak Volumes Not Solely Result of Economic Conditions
July 1—Despite economic improvements in most markets, growth in patient volumes remains weak—and that is compelling evidence that hospitals are experiencing systemic shifts in care delivery, according to a report released by Fitch Ratings.
Rates of growth in healthcare spending, as measured by the Centers for Medicare & Medicaid Services, are the lowest in decades, and this trend cannot be entirely explained by a weak economy, Fitch says in the report, Hospitals’ Credit Diagnosis.
In the first-quarter of 2013, same-hospital admissions dropped 3.8 percent, on average, while same-hospital adjusted admissions dropped 2.7 percent.
Hospital managers attributed a portion of the decline to calendar issues, such as Easter falling in March 2013, which could prompt a shift in volumes to the start of the second quarter.
The move toward value-based business models also is affecting healthcare utilization rates, Fitch says, as payers, providers, and patients face increasing financial incentives to encourage care delivery in the lowest-cost setting (typically not a hospital setting).
The number of newly insured Americans under the Affordable Care Act will provide a one-time boost in industry volumes, but will not offset lower rates of utilization growth, Fitch says. As a result, hospital leaders should be more aggressive in collaborating with post-acute providers and physicians to reduce care costs and improve care transitions.
Publication Date: Monday, July 01, 2013