MAY 2023

MARKET REPORT

What Happens When Costs are Cut?

We’ve all seen the headlines: declining margins and increased costs are slamming hospital profitability. But what happens when health systems cut costs, or have their reimbursements cut for them?  

Read more about this topic from our curated list of stories below…

Congress is looking at changes to Medicare. Hospitals aren’t thrilled

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Marketplace, May 16, 2023

Congress is considering nearly half a dozen pieces of legislation centered on an obscure Medicare payment change that could save the federal government as much as $150 billion over the next decade. 

Modern Healthcare, May 10, 2023

A March study in the Journal of General Internal Medicine, co-authored by Bai, found hospitals’ administrative costs grew at a faster rate than clinical costs after the pandemic hit in 2020. The study, which assessed more than 1,400 Medicare-certified acute care hospitals, found median administrative expenses increased 6.2% from 2019 to 2020, compared with a 0.6% increase in clinical expenses during that period. 

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Fierce Healthcare, May 10, 2023

Spurred partly by the fact that in an effort to cut costs, Medicaid has focused on emergency departments, billing families for pediatric ED visits based on whether that care was “emergent” or not. “Black and Hispanic children were significantly more likely to have their ED visits classified as nonemergent,” the study said. 

Association of American Medical Colleges, May 9, 2023

“We’re going from basically universal coverage … [back to] our normal system [which] is fractured and fragmented and unequal,” says Georges Benjamin, MD, executive director of the American Public Health Association. “The [emergency federal funding] kept a lot of hospitals afloat [and] provided needed dollars for staffing, infrastructure, and therapeutics. I think it makes a strong argument for government intervention in our health care system.” 

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Becker’s Healthcare, May 12, 2023

McLaren St. Luke’s Hospital in Maumee, Ohio, will lay off 743 workers, including 239 registered nurses, when it permanently closes this spring. Other affected roles include physical therapists, radiology technicians, respiratory therapists, pharmacists and pharmacy support staff, and nursing assistants. The hospital’s COO is also affected, and a spokesperson for McLaren Health Care told Becker’s other senior leadership roles are also affected 

Modern Healthcare, May 18, 2023

The agreement marks the first instance that a hospital has been held accountable for violating staffing rules. 

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