Hospital Cost Shifting May Be a Thing of the Past

Published Online: October 23, 2013

Convention wisdom has long held that hospitals make up for reimbursement shortfalls in government insurance and uncompensated care by shifting those costs to the privately insured.

Two studies released this month indicate that this may no longer be the case, although they reach different conclusions about how hospitals are coping with the slowdown in Medicare and Medicaid financing.

Rice University economist Vivian Ho and her colleagues looked at revenue by payer at Texas hospitals between 2000 and 2007. They concluded that hospitals have grown revenue by increased use of technology. Ho said she found no evidence that hospitals are shifting costs to private payers to compensate for the fact that they have to deal with the nation’s highest percentage of uninsured patients. She said technology accounted for two-thirds of the growth in prices. She also noted that hospitals are treating sicker patients because lower-acuity cases are being treated more frequently in outpatient settings.

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Source: Healthcare Daily