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FORECASTING: Hospital payer mix 2014 and 2024, U.S.

What are the projections for U.S. hospitals’ Medicare margins over the next 10 years?  This brief article by a staff specialist at the Healthcare Financial Management Association takes a look at data from the Congressional Budget Office and the Medicare Payment Advisory Commission to address this issue.  I especially like the inclusion of payer mix statistics for the two endpoint years.  Here they are:

RECENT HOSPITAL PAYER MIX: 2014

  • 37.8 percent  Commercial
  • 35.1 percent Medicare
  • 18.2 percent Medicaid
  •   5.8 percent Other governmental
  •   3.1 percent Self-pay

FUTURE HOSPITAL PAYER MIX: 2024 projections

  • 40.0 percent Medicare
  • 33.0 percent Commercial
  • 18.4 percent Medicaid
  •   5.7 percent Other governmental
  •   2.9 percent Self-pay

Source: Mulvany, C. (2016, Apr.). Margins under pressure. HFM. Healthcare Financial Management, 70(4), 30-33. Click here: https://www.hfma.org/Content.aspx?id=47230 Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Top 10 most expensive conditions treated in hospitals, 2011

Here are the top 10 most expensive conditions that were treated in community hospitals in the United States in 2011 (all payer data):

  1. Septicemia (except in labor)
  2. Osteoarthritis
  3. Complication of device, implant or graft
  4. Liveborn
  5. Acute myocardial infarction
  6. Spondylosis, intervertebral disc disorders, other back problems
  7. Pneumonia (except that caused by tuberculosis and sexually transmitted diseases)
  8. Congestive heart failure, nonhypertensive
  9. Coronary atherosclerosis
  10. Respiratory failure, insufficiency, arrest (adult)

These data are from the Healthcare Cost and Utilization Project (HCUP) 2011 Nationwide Inpatient Sample.  The report has data for the top 20 conditions.  There are also separate breakdowns of the most expensive conditions by payer — for Medicare, Medicaid, and private insurers.  Interestingly, for Medicaid and for private insurers, newborns represent the number 1 most expensive condition.

PAYER MIX FOR COMMUNITY HOSPITALS

The report gives this payer mix for 2011:

  • 47% Medicare
  • 29% private insurance
  • 16% Medicaid
  •   4% uninsured
  •   4% other/missing

Source: Torio, C.M., and Andrews, R.M.  National inpatient hospital costs: the most expensive conditions by payer, 2011.  Statistical Brief;160, Aug. 2013.  Click here for full text: http://www.hcup-us.ahrq.gov/reports/statbriefs/sb160.jsp  Posted by AHA Resource Center (312) 422-2050 rc@aha.org

How Hospital Costs Are Distributed by Payer Type

For fiscal year 2011, hospital costs were distributed among payers this way:

  • Medicare: 39.3%
  • Private payer: 34.6%
  • Medicaid: 16.3%
  • Uncompensated care: 5.9%
  • Non-patient [cafeterias, parking lots, gift shops & other non-patient care services]: 2.1%
  • Other government: 1.8%

The private payer share has declined from 41.8% in 1980.

Source: Chart 4.5: Distribution of hospital cost by payer type, 1980, 2000, and 2011. In: Trendwatch Chartbook 2013. American Hospital Association, Feb. 26, 2013. http://www.aha.org/research/reports/tw/chartbook/2013/chart4-5.pdf

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org