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The effects of Maryland’s all-payer rate regulation, the only of its kind in the nation, are clearly seen in the HCI results where Maryland hospital charges are approximately one-third of the US average.  As rate changes have been heavily limited for the past thirty-plus years, it’s no surprise to see Maryland and the Baltimore metro area as the lowest charge regions in the country.  As we know, payment is the real key in hospital-rate setting and our latest research on charges supports that conclusion.  Smaller rural hospitals, typically with more percentage of charge contracts, have lower charges than larger urban hospitals where more fixed payment levels exist.  We also see high margin hospitals with significantly higher charges than low margin hospitals nationally.

To download the pdf click here.

The FY19 IPPS Proposed Rule contains a section for requirements for hospitals to make public a list of their standard charges via the internet. This section of the proposed rule revisits a reminder contained in the FY15 IPPS Proposed Rule and ultimately the initial calls for transparency in the Affordable Care Act (specifically, 2718(e) of the Public Health Service Act). That language required hospitals to “either make public a list of their standard charges (whether that be the chargemaster itself or in another form of their choice) or their policies for allowing the public to view a list of those charges in response to an inquiry.”

It is no surprise that the CMS is attempting to continue this national dialogue as many providers still struggle with how to effectively improve price transparency. In fact, our firm has conducted national provider surveys on how hospitals are approaching price transparency and the areas that tend to receive the most price inquiries from patients. The results of those surveys have been transferred into HFMA-related publications. What we’ve found is that the vast majority of hospitals are complying with the ACA transparency language by providing a means for patients to request pricing information – but not – through public display of pricing information via a website or some other form.

As a result, the FY19 IPPS Proposed Rule indicates that as of January 1, 2019 guidelines will be updated to require hospitals to make prices available via the internet. In addition, the proposed rule requests input on several price transparency definitions, methods, and measures. The purpose of this paper is to provide hospitals with language that can be used to respond to the CMS. We have submitted this as an official comment, however, we believe multiple voices should be heard so we are providing our thoughts as a resource.

Click here to view our full response and learn how you can comment on the proposed rule as well.

Health systems must decide which hospitals should be targeted and how quickly price reductions can be implemented. These systems are beginning to establish strategic pricing directives that deal explicitly with outpatient pricing at their individual hospitals. These systems have two critical decisions: which hospitals should be targeted and how quickly price reductions can be implemented.

In our new white paper, which appeared in the Spring issue of HFMA Strategic Financial Planning, Bill Cleverley describes how hospitals can respond to increasing pressure to lower prices for “shoppable” services.

To download the white paper click here: Best Strategies For Cutting Outpatient Prices.

To see all our recent research and white papers click here.

The 2017 State of the Hospital Industry published by Cleverley and Associates shows a dramatic difference between the Bureau of Labor Statistics reported values for hospital cost inflation when compared to actual payments received by hospitals when all payers, including government are included.

During the period 2010 to 2015, the BLS reported average annual inflation rates for hospital outpatient services of 4.44% and 4.89% for hospital inpatient services.  Data for all short term acute care hospitals in the US during the same period averaged 1.2% using the Net Patient Revenue per Equivalent Discharge^TM.  Other key findings showed that average 5-year hospital inflation rates increased the greatest in Texas (2.4%) and were the lowest in South Dakota (-2.0%).  The Austin MSA had the highest increase (3.9%) while Jacksonville had the lowest value (-2.1%).  Investor Owned hospitals had higher rates of inflation than Voluntary non-profit hospitals (1.5% compared to 1.0%).

The 2017 State of the Hospital Industry is an annual study that presents a concise yet revealing statistical analysis of the US hospital industry. More than 80 key performance metrics are presented across a three-year period providing an insightful review of the financial performance of one the largest sectors of the US economy. It’s a great reference source for those involved in hospital finance. The publication also presents the annual Community Value Index® Leadership Awards. The Community Value Index® (CVI) was developed by Cleverley & Associates to provide a measure of the value that a hospital provides to its community by examining ten measures in four key performance areas. A complete list of the highest ranked hospitals is also provided.

Written by William O. Cleverley, Ph.D., a noted expert in healthcare finance, the State of the Hospital Industry reports selected measures of hospital financial performance and discusses the critical factors that lie behind them.  The publication focuses on the US acute-care hospital industry over a three-year period (2013-2015).

To read more, or order the book, you can click here!