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