Healthcare Financial News

Hospital total margins recovered in the first quarter of 2009 with approximately 30 percent of hospitals operating at a loss, according to a new report from Thomson Reuters. In comparison, half of hospitals experienced operating losses in the third quarter of 2008, the analysis stated.

Median total margin improved for all 500 hospitals in the study, rising from 0.17 percent to 3.1 percent. However, results for individual hospitals in the first quarter of 2009 varied widely, from -1 percent or below in the bottom quartile to 7 percent or more in the top quartile.

Inpatient discharges for all hospitals began to decline shortly after the recession started but the rate of decline varied by type of hospital, researchers said. Expense growth was nearly flat in the first quarter of 2009, which researchers attributed to careful management of labor costs.

Hospital cash reserves continued to be stressed in the first quarter of the year, with median days cash on hand close to 90 days.

Download the report from Thomson Reuters (free registration required).

New regulations requiring healthcare providers, health plans, and other entities covered by the Health Insurance Portability and Accountability Act (HIPAA) to notify individuals when their health information is breached were issued today by the U.S. Department of Health and Human Services (HHS).

These "breach notification" regulations implement provisions of the Health Information Technology for Economic and Clinical Health Act, passed as part of American Recovery and Reinvestment Act of 2009.

The regulations require healthcare providers and other HIPAA covered entities to promptly notify affected individuals of a breach, as well as the HHS Secretary and the media in cases where a breach affects more than 500 individuals. Breaches affecting fewer than 500 individuals will be reported to the HHS Secretary on an annual basis. The regulations also require business associates of covered entities to notify the covered entity of breaches at or by the business associate. 

To determine when information is "unsecured" and notification is required, HHS is also issuing an update to its guidance specifying encryption and destruction as the technologies and methodologies that render protected health information unusable, unreadable, or indecipherable to unauthorized individuals. Entities that secure health information as specified by the guidance through encryption or destruction are relieved from having to notify in the event of a breach of such information. This guidance will be updated annually.

The HHS interim final regulations are effective 30 days after publication in the Federal Register and include a 60-day public comment period.

Read the HHS press release.

Wholesale prices for hospitals rose for the fourth consecutive month, increasing 0.1 percent in July, according to preliminary data released yesterday by the U.S. Bureau of Labor Statistics (BLS). Prices had increased 0.2 percent in June. In July 2008, the wholesale hospital price index rose 0.3 percent. For the 12-month period ending in July, the hospital Producer Price Index (PPI) rose 2.5 percent as compared with 3.4 percent for the year-ago period.

The hospital PPI measures changes in actual or expected payment received for services across payer types, including the patient’s portion of the bill.

Wholesale physician office prices increased 0.6 percent last month compared with a 0.2 percent increase in June, the BLS reported. The physician PPI was flat in July 2008. For the 12 months that ended in July, the wholesale physician price index rose 2.5 percent as compared with 0.8 percent during the prior year.