Underpayment by Medicare and Medicaid to U.S. hospitals reached $56 billion in 2012, according to a factsheet released Jan. 14 by the American Hospital Association. Based on data from the AHA’s Annual Survey of Hospitals, Medicare reimbursed just 86 cents and Medicaid 89 cents for every dollar hospitals spent caring for these patients in 2012.
As reported earlier this month, U.S. hospitals also provided $45.9 billion in uncompensated care (charity care and bad debt) in 2012, $4.8 billion more than in 2011.
U.S. spending on health care grew 3.7% in 2012, marking the fourth straight year of low growth, the Centers for Medicare & Medicaid Services reported Jan. 6 in Health Affairs. Spending for hospital care increased 4.9% in 2012, 1.5 percentage points more than in 2011, but still well below historical averages. Spending also accelerated in 2012 for physician and clinical services (4.6%), Medicaid (3.3%) and out-of-pocket expenditures (3.8%), while it slowed for Medicare, prescription drugs and skilled nursing facilities.
U.S. hospitals provided $45.9 billion in uncompensated care in 2012, according to the latest data from the American Hospital Association's Annual Survey of Hospitals. That's $4.8 billion, or 11.7%, more than in 2011.
The total includes "bad debt" (services for which hospitals anticipated but did not receive payment) and charity care (services for which hospitals neither received nor expected payment because they determined, with help from the patient, the patient's inability to pay). It does not include Medicaid and Medicare underpayment.
A report released Nov. 20 by the White House Council of Economic Advisors looks at factors contributing to the historically low growth in health care spending and prices, attributing them in part to the Patient Protection and Affordable Care Act.
“The evidence is clear that recent trends in health care spending and price growth reflect, at least in part, ongoing structural changes in the health care sector,” the report concludes. “…The evidence also suggests that the ACA is already contributing to lower spending and price growth and that these effects will grow in the years ahead, bringing lower cost, higher quality care to Medicare and Medicaid beneficiaries and to the health system as a whole.”
Among other trends, the report notes that per capita spending on hospital care “is growing at less than half the long-term historical average rate and more than 1 percentage point slower than the most recent historical period.” Health care price growth has slowed relative to inflation in the broader economy and “is running at less than half the rate seen historically,” the report notes.
The Centers for Medicare & Medicaid Services (CMS) provides detailed trend data — both historical and projections — on national health expenditures. This article, which also contains a lot of data, is a good companion to the website because in it, CMS analysts discuss the factors that they considered to be influential in developing their projections, such as the effect of the implementation of the Affordable Care Act.
Hospital price growth is at its lowest rate in more than a decade, while insurance premiums continue to outpace hospital price growth, according to an infographic released July 24 by the American Hospital Association. The data contradict recently reported claims that consolidation in the hospital field is leading to higher prices.
While fundamental changes in health care delivery and payment are driving hospitals toward one another and toward their medical staffs, only about 10% of hospitals have been part of a merger or acquisition in the past six years, and growth in spending on hospital care is at historic lows, the infographic notes.
“Our results suggest that beneficiaries in geographic areas with higher total cost per beneficiary are sicker and therefore have more episodes of care,” the authors said. “The prevalence of most conditions we examined was significantly greater in high-cost areas, consistent with our finding of higher comorbidity scores in those areas.”
The study, funded by National Institute on Aging, examined episode and total annual costs for 10 common conditions in 60 nationally representative communities. Episode treatment costs varied widely across communities, but patterns of geographic cost variation were not consistent across conditions.
Only a small percentage of costs for patients in the top portion of Medicare spending appear to be related to preventable emergency department visits and hospitalizations, according to a study in this week’s Journal of the American Medical Association. The study looked at potentially preventable ED visits and hospitalizations among a sample of patients in the top decile of Medicare spending in 2009. Only 10% of these patients had acute-care costs that were considered preventable.
“The biggest drivers of inpatient spending for high-cost patients were catastrophic events such as sepsis, stroke, and myocardial infarction, as well as cancer and expensive orthopedic procedures such as spine surgery and hip replacement,” the authors said. “These findings suggest that strategies focused on enhanced outpatient management of chronic disease, while critically important, may not be focused on the biggest and most expensive problems plaguing Medicare’s high-cost patients.”
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