Slow­down in hospi­tal ad­mis­sions could be the new norm

Modern Healthcare - - NEWS - By Dave Barkholz

The surge in hospi­tal ad­mis­sions due to ex­panded cov­er­age un­der the Af­ford­able Care Act ap­pears to be ta­per­ing off. While ad­mis­sions rose 3% to 4% an­nu­ally in the years im­me­di­ately af­ter the ACA was en­acted, the rate has slowed to 1% to 2% in re­cent months as the num­ber of newly in­sured has flat­tened and the re­liance on high-de­ductible plans has grown.

As ev­i­denced by the rough sec­ond quar­ter at most hospi­tal sys­tems, the “new normal” of 1% to 2% might be op­ti­mistic. Giants HCA, Com­mu­nity Health Sys­tems, Tenet Health­care Corp. and LifePoint Health felt the sting of flat to lower ad­mis­sions in the quar­ter, caus­ing earn­ings de­clines. They also all cut earn­ings guid­ance for the year.

The few not-for-profit hospi­tal sys­tems that dis­closed their re­sults last week fared lit­tle bet­ter. Four­teen-hospi­tal In­di­ana Univer­sity Health posted a 46% drop in op­er­at­ing in­come in the quar­ter on a year-over-year ad­mis­sions de­cline of 2%.

Wel­lS­tar Health Sys­tem of Ma­ri­etta, Ga., saw flat ad­mis­sions across its 11 hos­pi­tals for its fis­cal year ended June 30, though six hos­pi­tals ac­quired a year ago drew down the av­er­age, said Car­rie Owen Pli­etz, chief op­er­at­ing of­fi­cer of Wel­lS­tar’s hospi­tal di­vi­sion. That said, op­er­at­ing mar­gins for the sys­tem’s hos­pi­tals rose a notch to a re­spectable 4.7% from 4.6% the year ear­lier on strong cost con­trols and a higher-acu­ity case mix.

“Times are still pretty good for hos­pi­tals but the writ­ing is on the wall,” said Paul Hughes-Cromwick, co-founder of the Alta- rum In­sti­tute’s Cen­ter for Sus­tain­able Health Spend­ing in Ann Ar­bor, Mich.

Tenet Pres­i­dent of Hospi­tal Op­er­a­tions Eric Evans blamed the sys­tem’s 1% de­cline in sec­ond-quar­ter ad­mis­sions on high de­ductible plans, fewer births at Tenet hos­pi­tals and some lost busi­ness be­cause Tenet was an out-of-net­work provider for Hu­mana for part of the quar­ter.

“In the last cou­ple of years, de­ductibles in many cases have risen by as much as 30%, and that is chang­ing how peo­ple ac­cess care, at least in the short run,” Evans told an­a­lysts dur­ing Tenet’s earn­ings call Tues­day. Tenet is the na­tion’s third-largest in­vestor-owned hospi­tal chain with 77 hos­pi­tals.

Evans said vol­umes are hold­ing up in the crit­i­cal spe­cial­ties, such as car­di­ol­ogy and neu­rol­ogy. Those are ar­eas that Tenet has been ag­gres­sively strength­en­ing, in­clud­ing re­cently fin­ish­ing four ma­jor hospi­tal ex­pan­sion projects in Detroit, San An­to­nio, El Paso, Texas and Del­ray Beach, Fla.

But fewer elec­tive surg­eries and pro­ce­dures are damp­en­ing vol­umes, par­tially driven by con­sumers de­cid­ing whether they can af­ford them.

In 2016, for the first time, more than half of all work­ers with sin­gle cov­er­age (51%) faced a de­ductible of at least $1,000, ac­cord­ing to a study re­leased last Septem­ber by the Kaiser Fam­ily Foun­da­tion/Health Re­search & Ed­u­ca­tional Trust. The study showed that 29% of work­ers were in high-de­ductible plans com­pared with 20% two years ear­lier.

Hospi­tal sys­tems are com­bat­ing high de­ductibles and con­sumer price-shop­ping by ex­pand­ing am­bu­la­tory-care points and mak­ing sure they have hospi­tal spe­cial­ties to cap­ture sicker pa­tients.

Dal­las-based Tenet has 99 ur­gent-care cen­ters and 19 free-stand­ing emer­gency de­part­ments in its ma­jor mar­kets to­day com­pared with 52 and 15, re­spec­tively, in 2014. More­over, the sys­tem is try­ing to lever­age the $2 bil­lion-plus ma­jor­ity ac­qui­si­tion of gi­ant United Sur­gi­cal Part­ners In­ter­na­tional in 2015 to of­fer more am­bu­la­tory surgery op­tions in its hospi­tal mar­kets and grow that busi­ness out­side those mar­kets.

Wel­lS­tar is adding physi­cians in its Ge­or­gia mar­kets and has built four com­pre­hen­sive health parks around its hos­pi­tals to of­fer nearly ev­ery ser­vice short of in­pa­tient care, in­clud­ing di­ag­nos­tics, ther­apy and even healthy cook­ing classes, Owen Pli­etz said. The health sys­tem is also hav­ing suc­cess draw­ing in pa­tients with daily or weekly health­care spe­cials.

For ex­am­ple, for a lim­ited time, Wel­lS­tar is of­fer­ing coro­nary cal­cium scans for $99 for in­di­vid­u­als or $149 for a cou­ple. The tests are cash-only and not sub­ject to in­surance claims. Then there’s “Think Pink Thurs­day” and “Walk In Wed­nes­day” where pa­tients can walk in for mam­mo­grams at two health parks.

Source: Com­piled by Mod­ern Health­care from Q2 fi­nan­cial fil­ings

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