Fitch: For-profit hospital admissions inched up in 2015, but trend won't last
Agency says shift to outpatient services, and the stiff competition among healthcare providers to capture that market share, will continue.
A new report by credit ratings agency Fitch claims 2015 was the first year since 2008 to see growth in inpatient hospital admissions at major for-profit hospitals, but analysts don't expect that to continue.
For the full year, Fitch said these hospitals saw 0.75 percent growth in admissions. In the fourth quarter of 2015, hospitals posted 1.2 percent growth in adjusted admissions.
Fitch expects that trend to continue at least into the first quarter of 2016.
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The agency also expects growth in adjusted admissions -- adjusted to account for skilled nursing, chemical dependency, and outpatient activity -- to outpace growth in admissions, depending on how much of the outpatient market hospital companies can capture. Between 2008-2015, the performance gap between growth in volumes of admissions and adjusted admissions averaged about twofold annually.
Capital investment in acute care should help to stabilize the slow erosion in admissions, said Fitch, but a shift to outpatient services, and the stiff competition among healthcare providers to capture that market share, will continue.
Pressure on hospital admissions as a result of regulatory reforms like Medicare payment penalties for readmissions should also level off, Fitch said, but it regulations have also made it hard to predict what the baseline will be. For example, hospital providers in rural markets have been reported drops in short-stay admissions for several years.
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Fitch offered one possible explanation for this trend: that process and productivity enhancements, as well as technological innovation, are working to keep more patients out of the hospital.
"A repeat performance of positive growth is unlikely in 2016, since the improving economy and Affordable Care Act provided a lift that can't overtake longer-term headwinds to growth, like pressure by payors to reduce short-stays and readmissions," said Managing Director Megan Neuburger in a statement.
The Centers for Medicare and Medicaid Services penalizes hospitals for having readmission rates higher than allowed. It will penalize 2,592 hospitals this year, resulting in expected fiscal year savings for the federal government in the vicinity of $420 million.
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